Is Evergrande China’s “Lehman Brothers Moment” and could it actually be good for Bitcoin?

China’s second largest real estate developer, Evergrande, has $ 300 billion in debt and there are fears of widespread impact on financial markets. But Bitcoin is looking good, according to famous analyst PlanB.

There are grumbling concerns that the Chinese real estate company, which has investing relationships with companies around the world, is facing a “Lehman Brothers moment” that could trigger a domino global market crash.

Lehman Brothers was a global financial services company whose bankruptcy in 2008 was caused by the subprime mortgage crisis that led to the US stock market crash and global financial crisis that year. It was partly the subject of the 2015 film The Big Short.

Lehman Brothers had $ 639 billion in assets and $ 613 billion in liabilities, making Evergrande’s debt much smaller but still substantial.

What does this have to do with bitcoin and crypto?

There are concerns that the resulting negative sentiment from an Evergrande default would crash all risky asset classes, including crypto.

But take a look at this latest tweet from PlanB, creator of the Bitcoin Stock to Flow chart …

China’s Lehman moment. The money printing will be massive, I repeat MASSIVE! This is good for #bitcoin

– PlanB (@ 100 trillion USD) September 15, 2021

While it’s hard to imagine how another 2008-style stock market crash could potentially have good short-term effects on any market, especially risky, highly volatile assets, PlanB refers to the Bitcoin inflation hedge narrative “money printer goes brrrr”.

That and maybe the possibility of government bailouts for Evergrande.

Perhaps “could ultimately be good for Bitcoin” would be the more precise way of phrasing it.

Central banks have been printing money on a massive scale in recent years, especially since the global pandemic was first hit hard in early 2020.

Many observers believe that inflation hedging has been the main driver behind the rise of bitcoin and crypto since that time when the US alone printed more than $ 8 trillion, resulting in a current national debt of over $ 28.7 trillion .

Bitcoin has risen from a low of nearly $ 3,000 to today’s price of around $ 48,000 over the same period, hitting a high of nearly $ 65,000 in April.

Corporations hold 7 trillion in cash, which inflation squeezes significantly each year.

There are only 1.817 million #Bitcoin on the exchanges.

It would only take 1.5% of that corporate cash to buy all of the BTC available.

Nobody is bullish enough!

– Lark Davis (@TheCryptoLark) September 16, 2021

Meanwhile, the largest U.S. dollar stablecoin issuer, Tether (USDT), has confirmed that it does not, and has never held, any commercial paper or any other debt or security issued by Evergrande.

This has sparked some background fears in crypto circles this week, although the market has been showing signs of strength since last weekend. Even so, the skeptics are still in place …

Tether refuses to dispute ownership of Chinese commercial paper. They came out and said they don’t hold Evergrande Commercial Paper.

But whose Chinese commercial paper do they hold and is there an exposure in Evergrande in these instruments. Tether refuses to get clean.

– Bitfinex’ed 🔥 (@Bitfinexed) September 15, 2021

Evergrande’s stock was trading at Hong Kong $ 2.63 at the close of trading in Hong Kong on Thursday, up from HKD 5.26 in early July, according to Cointelegraph. At its peak in 2017, it was over HKD 30.


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