Home » Are Crypto Prices Set to Soar After China Stocks Crash, Yuan Sells Off?

Are Crypto Prices Set to Soar After China Stocks Crash, Yuan Sells Off?

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Shares of some of China’s biggest companies fell sharply. The stock market crash came after Chinese President Xi Jinping secured his third term in office. The stock market crash cost companies more than $1 trillion.

Chinese stocks plunge as Xi Jinping secures third term

The 10 largest Chinese companies listed on the New York Stock Exchange lost $67.7 billion in market capitalization on Monday, according to a report. forbesEach of these companies lost more than 8% of their market capitalization.

The stock market crash was witnessed by giants such as Alibaba and tech company Pinduoduo, whose stocks fell 13% and 25%, respectively. The decline spilled over to more than 200 Chinese companies listed in the US. The Nasdaq Golden Dragon China Index plunged he 14% on Monday. The index is at its lowest level since 2013.

Xi Jinping and the Communist Party were expected to remain in power. Nonetheless, news of the development over the weekend sparked selling across markets as investors fear the hawkish stance the government has taken in regulating businesses and COVID-19 policies. .

Losses were felt not only in the US market, but also in China. The Hang Seng China Enterprises Index fell 6.4% on Monday. The Chinese yuan also fell against the dollar.

Earlier this year, the Chinese company announced its intention to delist from the New York exchange for failing to comply with US audit requirements. But in August, the company pulled out of its delisting plans after the U.S. and Chinese governments agreed to provide regulators with additional accounting data.

The decline in stock prices is happening despite China releasing positive economic growth data. Moreover, the fallout in Chinese companies’ stock prices did not appear to have affected the US market, with the Dow Jones Industrial Average and the S&P 500 index up slightly 1.3% and he 1.2% respectively on Monday.

Chinese government tries to curb stocks and yuan crash

The Chinese government has already taken measures to prevent the crash from getting worse. report It shows that the government is ordering state banks to buy stocks to contain the crash.

Meanwhile, the People’s Bank of China and China’s foreign exchange regulator also gain Limits on cross-border lending for Chinese companies. The move aims to encourage offshore borrowing, which could encourage foreign capital inflows.

But investors are still concerned about the Community Party’s focus on draconian COVID-19 policies and national security, rather than how they can support financial markets, so if these policies are How it helps control bleeding remains unknown.

Good news for crypto?

A plummeting Chinese yuan and stock market collapse could bode well for cryptocurrency adoption in the country. Big cryptocurrencies such as Bitcoin and stablecoins have been touted as a hedge against inflation. In countries with depreciating currencies, such as Turkey and Argentina, the trading volume of cryptocurrencies has surged.

The Chinese government banned cryptocurrency mining and trading last year.But the country is back Top 10 countries with Bitcoin usage Despite this ban.Moreover, underground bitcoin mining site We’ve made China one of the largest Bitcoin mining hubs. Therefore, a fall in the value of the renminbi could trigger a surge in crypto trading activity in the country.

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