Bitcoin Fell Below $40,000, Fear is Greed?

Following Monday’s big drop in Hong Kong and U.S. stocks, bitcoin was not spared and fell below $40,000 again.

On September 22, BTC, the leader of cryptocurrencies, made another new low, overshooting by 18.9% in the last seven days. ETH dumped below $3,000$ for the first time since August 6, overshooting by 27.9% in the last seven days.

As mainstream coins plunge, almost all cryptocurrencies are in the red. The crypto market wobbled, with over $1.2 billion worth of crypto futures being liquidated in just one day.

The cause of the severe market volatility is the debt crisis.

Firstly: global capital markets were scared out of their wits by the U.S. federal government shutdown in October over the debt ceiling.

Secondly: Overseas lenders are scared out of their wits by China’s two trillion debt defaults.

It is saying that due to the uncertainty of the secondary market, Hong Kong stocks fell sharply and suddenly after the opening bell. U.S. stocks opened with the S&P 500, Dow Jones Industrial Average and global stock markets all taking a hit on September 20. When there is uncertainty in the global economy, investors tend to sell riskier assets, such as stocks, and also Bitcoin.

Fear is greed?

The U.S. House of Representatives approved the debt extension in the morning of September 22, global stock markets stopped falling, and China Evergrande also announced that it would pay the interest on the bonds on time, and the atmosphere of panic instantly turned into a peaceful one at noon. The difference in history and culture naturally creates a difference in the way of extrapolation and models.

For Wall Street capitalists, the two trillion debt default real estate predator Evergrande can be equated to the 2008 subprime mortgage crisis, they believe that such a problem in Evergrande will trigger systemic financial risks, have sold to hedge against risk, and even said deliberately.

And for China’s financial bigwigs, Evergrande’s debt problem is no longer serious, the Chinese government will definitely prop up the bottom at the last moment and will not trigger systemic risks, so naturally there are many ambitious receivers.

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