"So is this a positive or negative sign?"
Significant changes in the cryptocurrency market in China could be triggered by the fact that giant Chinese real estate firm Evergrande was ordered to be liquidated by a Hong Kong court after financial markets around the world experienced weakness that affected investor sentiment.
The judgment marks the end of 19 months of dialogue in which Evergrande was hit after its foreign creditors could not agree on how to restructure the firm's huge debts.
There is no denying that Evergrande is the most famous home developer in the Asian country, but its inability to pay its debts has caused the firm to file for bankruptcy in the United States (US) in 2023.
As of 2021, Evergrande's debt that sparked the real estate crisis is still impacting China's economy plus the firm's total liabilities total $333 billion after it filed for bankruptcy.
So here it can be seen that the liquidation of Evergrande will cause misery in the Chinese stock market and the real estate sector as well as put pressure on the financial markets around the world as well as the crypto market.
This is because Evergrande's previous debt restructuring decision has had a major impact on the price of Bitcoin (BTC) to the extent that it has affected investor sentiment for weeks, therefore investor interest in risky assets may be further reduced.
However, the situation could see the share price fall as investors withdraw their money and this means investment in crypto could increase amid many people trying to protect their money.
Although the use of crypto is prohibited in mainland China and cross-border capital flows are strictly controlled, users can still trade tokens such as BTC on OKX and Binance or through over-the-counter methods* including allowing investors to create bank accounts abroad to buy crypto.
*Refers to trading through agencies or people who carry out transactions for you, separate from normal exchanges
