Crypto Market Loses $250 Billion as Evergrande Fears Mount

A jittery day for both Wall Street and digital asset investors questioning whether Evergrande debt woes can be contained.


Blockworks exclusive art by Axel Rangel


key takeaways

  • Crypto market cap sinks amid the Chinese real estate giant’s debt crisis
  • Equities globally are headed for their worst day in two months

Cryptocurrencies dipped lower Monday in a broad sell-off many analysts attribute to growing concerns over China Evergrande Group’s debt crisis and contagion fears. 

Cryptocurrency’s market capitalization fell below $1.9 trillion Monday morning, according to data from CoinMarketCap. Following a relatively positive weekend for digital assets, bitcoin fell below $45,000 and Ethereum has lost about 9% over the past 24 hours. 

“This weekend we saw a couple of the alternative layer-ones hit new all-time highs, specifically Avalanche and Cosmos, I do think that there was a fair bit of profit-taking, at least that’s kind of what we’re seeing at our desk,” said Joshua Lim, head of derivative trading at Genesis. “A lot of folks are taking risks off the table specifically because of this Evergrande news, and it helps that these names have outperformed a lot, coming into this.”

Mark Yusko, founder, chief investment officer and managing director of Morgan Creek Capital Management, shared his insight on a recent On the Margin Podcast with Blockworks’ co-founder Mike Ippolito.

Loading Tweet..

Risk on, risk off

Stocks globally were trading lower on Monday with the Dow Jones Industrial Index and the S&P 500 both down about 1.5%, at time of publication. Other Chinese real estate developers, such as Henderson Land Development Co, slipped as well. It is a correlation similar to the situation in March 2020, experts said, when the COVID crisis was the driver of markets. 

“Traditional markets right now are selling off, and all the correlations you typically see when the market is fixated on one event or one risk, have come to light again,” said Roshun Patel, vice president at Genesis. “The Evergrande situation, whether it’s warranted or not, has the entire market fixated on this one thing and the fallout from it.”

Evergrande’s potential impact on the digital asset space is indicative of crypto’s status as an asset class, Lim said. 

“​​My personal view is, to the extent that crypto has become much more of a macro-integrated asset, a lot of people now treat it as just another risk bucket in their broader portfolio, the correlations on these sorts of macro events are going to be higher,” he said. 

Evergrande’s debt load stands somewhere north of $300 billion dollars, and they have bond payments to the tune of $83.5 million due September 23 on notes due in the first quarter of 2022. The company has 30 days from the scheduled payment date to pay, or the bond defaults.

The world is waiting to see how the Chinese government will respond and whether a bailout is on the table. The rescue of China Huarong Asset Management Co., announced August 18, was a tumultuous affair which Bloomberg News called a “culmination of months of bureaucratic infighting, ego-flexing and buck-passing.”

Evergrande shares were down 10% at the time of publication.

Are you a UK or EU reader that can’t get enough investor-focused content on digital assets?Join us in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket. Buy it now.


Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Screen Shot 2024-05-16 at 14.53.45.png


Loss-versus-rebalancing (LVR) is arguably Ethereum DeFi’s biggest problem, and thus reducing LVR is fundamental to the success of Ethereum. This report dives into the world of LVR. We uncover its importance for AMM designers, discuss the two major mechanism design categories and various projects developing solutions, and offer a higher level perspective on the importance of AMMs in general.


Yesterday saw Congress’ upper chamber side with the House on a measure aimed at overturning SAB 121


Oklahoma’s new crypto bill will go into effect in November of this year


The deposits hit a $20 million cap in just 45 minutes


Twelve Democratic Senators voted in favor to pass the resolution Thursday

article-image is “aware” that bonding curve contracts on were exploited, and has since paused trading


Some investment pros are mulling crypto allocations between 1% and 10% and seeking ex-BTC exposure for interested clients