Snowed under its massive debt of over $300 billion, Evergrande Group is so huge that the fallout from any failure could hurt not just China’s economy. This could very well spread to markets in US and EU as well as the rest of the Asia.

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What exactly is Evergrande?

Evergrande has a position everywhere. Its main business is real estate, and it’s China’s second-largest property developer by sales.

• They own more than 1,300 real estate projects in over 280 cities
• Its property services management arm is involved in nearly 2,800 projects across more than 310 cities in China.
• The company has seven units dabbling in a wide range of industries, including electric vehicles, health-care services, consumer products, video and television production units and even a theme park.
• The firm says it has 200,000 employees, but indirectly creates more than 3.8 million jobs every year, according to its website.
• Evergrande’s shares and bonds are included in indexes across whole Asia.

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Who will be affected the most if it comes crashing down?

The pool of affected parties will include banks, suppliers, home-buyers, investors, retail. Evergrande warned this week its escalating troubles could lead to even broader default risks.

If the Evergrande can’t repay its debt, it could lead to a situation of “cross default” — where a default triggered in one situation may spread to other obligations, leading to broader contagion.

And currently, they are unable to repay the debt due to the size of it.

The banking industry will be among the first to be hit and they will be hit hard. And once the banks are hit it is only a matter of time when it comes to crypto.

Evergrande’s debt crisis may snowball down the road, and economic growth will not mitigate financial losses as was the case in the past.

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Should we fear?

I don't know but unfortunately China has a pretty big influence on markets even here in EU as also in US. If Evergrande comes crashing down, it could send ripples across markets which could cause a drastic change in crypto. Being vigilant is our best option right now.