The Evergrande Situation and what this means for the financial markets and crypto markets specifically

So today is pretty damn bloody in the crypto markets and broader worldwide financial markets today, pain, much pain.

Now first this red day is not a crypto-specific issue. It very well may be amplified by crypto-related regulatory issues by those dinosaurs in Congress. Now they’re back from recess, there will be discussions on stablecoin regulation and lending services like Coinbase’s USDT lending and Celsius, you know to ‘PrOtEcT uS fRoM mAkInG mOnEy’. This along with new regulations introduced as part of the infrastructure bill they’re pushing through.

Now on to Evergrande. Evergrande is a huge property developer in China currently going through a crisis as they have close to $300 billion in debts that they can’t make interest payments on, putting them at risk of collapse, in which case would lead to ripples throughout worldwide financial markets. They can’t simply take out further bank loans to make these payments due to that massive debt, no one is going to lend more money to them for obvious reasons.

There are two outcomes here: Evergrande collapses causing a domino effect throughout the Chinese financial system likely causing the collapse of several banks and potentially any foreign investors. Another option is that the Chinese government stumps up the bill to prevent this outcome (which almost has to happen to prevent worldwide financial panic, plus they can just print more money, everyones been doing it this whole pandemic so why not now?)

But let’s not be mistaken, the cause of all of this is once again over-leveraged banks relying on constant growth in the housing market in order to pay off the massive loans they’ve taken years beforehand, but the pandemic has caught them off guard and resulted in an absolute mess that is affected the average person once again! If you ask me this is long-term bullish for cryptocurrency in general as people come to realise we can participate in a new monetary system that isn’t susceptible to these idiot bankers fucking us over after they’ve gotten too greedy time after time again.

Best of luck to all and remember not to get shaken out over short-term volatility, look at the long-term picture and remember that crypto will not die, the bears thought it had when we hit 30k in May yet we’re much higher despite that huge crash.