Bitcoin tumbles on China crackdown
Prices of Bitcoin were trading lower to end the week, as it was reported that Chinese authorities were continuing their crackdown on cryptocurrency.
This comes as the PBOC or People’s Bank of China stated that any offerings of “trading, order matching, token issuance and derivatives for virtual currencies” were strictly prohibited.
|China’s Timeline with Crypto|
In 2013, the government defined bitcoin as a virtual commodity and said individuals were allowed to freely participate in its online trade. Later that year financial regulators banned banks and payment companies from providing bitcoin-related services.
In September 2017, China banned initial coin offerings (ICOs) in a bid to protect investors and curb financial risks.
By July 2018, 88 virtual currency trading platforms and 85 ICO platforms had withdrawn from the market
Earlier this year, Chinese regulators tightened restrictions that banned financial institutions and payment companies from providing services related to cryptocurrency.
The news was broken via an online Q&A on the bank’s site, where it also said that “Overseas virtual currency exchanges that use the internet to offer services to domestic residents are also considered illegal financial activity”.
BTCUSD fell to an intraday low of $40,994, with the price of Ethereum also dropping in today’s session.
Markets jittery as Evergrande defaults
Markets across the globe were jittery on Friday, as news broke out that China Evergrande had defaulted on its debt payment.
The company went into “technical default”, as it failed to clear payments for holders of its dollar bonds, with the deadline passing on Thursday.
Now, Evergrande has a grace period of 30-days, where it must fully satisfy the claims otherwise it will be officially declared in default.
3 days ago Chinese Real Estate giant Evergrande was largely blamed for Monday’s stock market selloff; however, the company’s CEO today spoke, attempting to calm market nerves.
Evergrande, was labelled “Lehman 2.0”, as onlookers anticipated its pending bankruptcy. investors around the world have grown increasingly concerned over whether the indebted and troubled Evergrande could spark a wider shock to the global economy.
In the United States, the NASDAQ was most impacted by the news trading -0.20% as of writing.
London’s FTSE 100 closed 0.38% lower.
German business confidence stalls ahead of election
Germany’s DAX 30 was another index to end the week lower, as data from the country showed that business morale had fallen.
The data, which was released by the Ifo, showed that confidence fell for a third consecutive month.
Ifo’s business climate survey came in at 98.8, marginally lower than the 98.9 expected sum.
|Germany’s election |
Investors are bracing themselves for the fallout from a highly unpredictable German election this weekend, analysts say that Europe’s bond markets are already hinting at a political shift.
Sunday’s vote remains wide open, leaving fund managers reluctant to make firm bets on the dizzying array of potential coalitions that could take months of post-election horse-trading to form.
Many attribute the decline to bottlenecks in the supply chain, caused by the Delta variant of COVID-19, which slowed down distribution channels within Europe’s largest economy.
As of writing, the DAX 30 was trading 0.72% lower.
Quote of the day – “I know where I’m getting out before I get in.”– Bruce Kovner