Massive protests have erupted across China and spread like wildfire amid the country’s strict COVID-19 restrictions. Events at Foxconn’s iPhone factory last week sparked further reactions across the country.
On Monday, November 28, global markets came under pressure as investor anxiety increased. The effect is also significant in the crypto space, with the broader crypto market dropping 3% in the past 24 hours.
The world’s largest crypto Bitcoin is down nearly 3%, trading at $16,180. On the other hand, altcoins like Ethereum (ETH), BNB, XRP, Polygon (MATIC), etc. are all down 4-8%.
Recent unrest in China could exploit vulnerability in crypto markets which have already been spooked by the collapse of crypto exchange FTX this month. Over the past month, Bitcoin and the broader crypto space have already fallen by 20%.
Today’s decline in the crypto market followed the correction in Asian stocks and US stock futures. Speaking to Bloomberg, Katrina Ell, senior economist at Moody’s Analytics Inc., said: “One of the risks in China is that Beijing’s current policy of Covid-zero mobility restrictions could be an obstacle to stabilizing the domestic demand”.
As said Bitcoin is already down 20% this month in November. This is the asset’s worst monthly performance since June 2022. It also marks the worst November on record for Bitcoin so far. Concerns have been brewing that another major crash trigger could send Bitcoin crashing all the way to $5,000.
With China, fear grows around the shrouded ether
Cryptocurrency watchers around the world have also shared their concerns about wrapped Ether, which is supposedly losing its connection to the actual Ether (ETH) token. The concerns stemmed from posts of jokes on Twitter that falsely claimed a break in the expected pegging between wETH and Ether.
Markus Thielen, head of research and strategy at crypto lender Matrixport, however, said they were “not too concerned” about wETH. Thielen said Wrapped Ether is based on smart contracts. He added:
“This will make it unlikely to actually be tampered with because no person or centralized entity should be able to manipulate the open-source smart contract,” which can also be checked for bugs or flaws. Despite the current market crisis, Matrixport seeks to raise $100 million at a valuation of $1.5 billion.
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