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The situation in China, which has long been discussing bankruptcy, has now turned the company upside down. The last-minute development also had a negative impact on the cryptocurrency. Inflation risks that affect everyone globally have significantly shaken the markets. Investors are fleeing to less risky assets, which is pulling down cryptocurrencies.
Evergrande Files for Bankruptcy
According to court documents, China Evergrande Group filed for Chapter 15 bankruptcy protection in New York on Thursday. Chapter 15 bankruptcy protects the company’s assets in the United States, while restructuring arrangements are being worked on elsewhere. International debt restructuring agreements sometimes require a Chapter 15 application during the completion of a transaction.
Evergrande‘s petition refers to restructuring operations carried out in Hong Kong and the Cayman Islands. The Chinese construction company has been working for months to finalize its offshore debt restructuring plan. In July, it obtained court approval to hold a vote on the agreement. The meetings are scheduled to take place towards the end of this month.
After the news of the bankruptcy broke, the price of Bitcoin dropped to $27,600. We may see bigger losses in the coming hours. Fortunately, Tether does not currently witness a massive selling wave as it sold its Chinese shares this year (and bought US bonds, etc.).
Today, bad news kept coming. The sales of SpaceX, Evergrande, and the Fed’s sanctions decision combined with the recently announced FOMC Minutes have shaken the cryptocurrency market.
