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China Injects $19 Billion to Bail Out Evergrande, Here’s How Crypto Market Can Benefit

Government faces investigation into Bitcoin Trust’s expenditure


The Chinese Real Estate giant Evergrande has defaulted on its debt payment and the fear of the company’s payment default has led to a collectible slump in the financial market world over. Many believe the crypto market’s downturn over the past week was also influenced by the same as investors rushed to liquidate their crypto funds. However, the Chinese Central Bank has injected 120 billion Yuan nearly $19 billion into the banking system in hopes of bailing out Evergrande.

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Evergrande’s default could prove costly for China and many pundits has predicted the country would try everything to stop Evergrande from failing and their predictions seems to be coming true. Now with Evergrande looking at a possible bail out, crypto market could see a trend reversal from bearish to bullish.

China’s Evergrande Bailout Plan Could Help Crypto Market

The crypto market saw its market cap dip below $2 trillion for the fist time in two months and major cryptocurrencies lost 20%-30% of their market cap over the past week. While September is historically proven to be a bearish month with negative returns in the past, the Evergrande crisis worked as a catalyst that took out most of the gains from the last two months.

Bitcoin ($BTC) briefly dropped below $40K before recovering above the key support, Ethereum ($ETH) is trading below $3,000 mark and many other crypto assets also lost more than 2o% of their market cap in September.Here’s how much top crypto assets have lost their market since Septmber 6th,

China
Source: Santiment

However, with China starting to influx stimuls into the banking system and the end of September can bring back the bulls to the crypto market again. Historical data shows that the final quarter of the year has proven to be bullish for the crypto market, thus the start of October could help the market resurge to its bullish ways as it did in August.

Disclaimer

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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