Bitcoin was down 7.8% to $43,685 by mid-afternoon in London. It marked the lowest level since early August.
Analysts said the cryptocurrency was collateral damage in the current market scare sparked by Chinese property developer Evergrande. Shares in Evergrande – one of China’s largest developers – crashed 10% in Hong Kong amid growing fears that the company may struggle to repay its mammoth debt pile. The company, which has liabilities of just over $300 billion, faces several debt repayment deadlines this week.
“It looks to me like the crypto market may be getting swept up a bit in the Evergrande drama that is battering global equities today,” Mati Greenspan, the founder of Quantum Economics, told the Standard. “Some are calling this China’s Lehman Moment, so it’s understandable that a lot of risk is coming off the table.”
Neil Wilson, chief market analyst at Market.com, said: “Who knew the crypto market was so correlated to Chinese property stocks.”
The broader cryptocurrency market was caught up in the sell off. The sector was down 9.9% over the last 24 hours, according to industry data provider CoinMarketCap.com.
Charles Hayter, founder of Crypto Compare, told the Standard: “Traditional markets are seeing some wobbles on inflation and credit worries with contagion the name of the game. There has been some heated price rises of late in the digital assets and this is a concerted risk off trade to consolidate.”
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