Bitcoin (BTC) has been on a rollercoaster ride within the past 24 hours as the digital asset reached a new all-time high of £51,451 ($69,000) before plummeting to £46,305 ($62,000) within a few hours.
The week had started rather calmly for bitcoin, with little volatility as it had appeared to be stuck around £44,812 ($60,000).
However, things gradually became intense when bitcoin neared its previous ATH of £50,042 ($67,000) and after suffering a brief rejection, crossed that peak and created a new one at £50,794 ($68,000).
24 hours later, bitcoin was recording yet another ATH of £51,541 ($69,000). Interestingly, the breakout had allegedly been spurred by the release of U.S inflation data, which saw a 6.2% spike in inflation rates.
As the cryptocurrency industry was preparing for a run towards £52,277 ($70,000), it all came crashing down. In a couple of hours, bitcoin shed more than £4,482 ($6,000) and settled at £46,900 ($62,800), resulting in a whopping £522.7 million ($700m) worth of liquidated positions.
Evergrande Default Rumors—The Culprit?
A few hours after bitcoin hit £51,541, several conflicting news arose about whether the Chinese property developer, Evergrande Group, had defaulted once again on its long-overdue loan payment of £110.5 million ($148m) to international investors.
Evergrande, the second-largest property developer in China, is named the world's most indebted property developer as it is in debt for roughly £224 billion ($300b).
There are mounting fears that the collapse of this highly indebted property giant could trigger a global financial crisis.
Therefore, once the Deutsche Markt Screening Agentur published an announcement on Wednesday that it was preparing bankruptcy proceedings against Evergrande for allegedly missing a payment on its outstanding debt, bitcoin's price slumped.
It was not until an hour later that fresh news surfaced that the company had not defaulted on its payment, however, the damage had already been done.
The rest of the crypto market also plunged as the market's total capitalization fell below £2.1 trillion, with about 81% of the liquidations coming from long positions.