By Gertrude Chavez-Dreyfuss and Saikat Chatterjee
NEWYORK/LONDON -Cryptocurrency prices sank on Monday as concerns over the spillover risk to the global economy from Chinese property group Evergrande’s troubles spread across financial markets.
Bitcoin, the world’s biggest and best-known cryptocurrency, tumbled to $42,453.97, its lowest level since Aug. 7 before trimming some losses to trade down 7.4% at $43,745. It hit a near four-month high above $52,000 on Sept. 6.
Smaller rival ether, the coin linked to the Ethereum blockchain network, fell more than 10% below $3,000 for the first time since early August. It was last down 7.6% at $3,071.
Market capitalization of the cryptocurrency market dropped 10% on Monday to under $1.94 trillion, from last Saturday’s $2.17 trillion.
The loss in the value of cryptocurrencies comes at a time when institutional interest in the space has surged and some investment banks have ramped up their forecasts for cryptocurrencies in the coming months.
“It’s red, red, red across the board today as the cryptocurrency markets follow the downturn being seen in traditional markets as China battles a highly-contagious property market crisis,” said Tim Frost, chief executive officer at Yield App, a financial technology company that enables users to invest in decentralized finance.
“Bitcoin has lost support at the $44,000 mark and looks set to test its $39,000 floor. If it falls through here we can expect a significant correction to come,” he added.
Bitcoin shorts in the futures markets have increased to 1,187 contracts, the largest since early August, according to data from the Commodity Futures Trading Commission released Friday.