Global Markets Down, Will China Unrest Trigger Next Bitcoin Correction?

Massive protests have erupted across China and spreading like wildfire amid the country’s strict COVID-19 restrictions. The events at Foxconn’s iPhone factory last week have triggered further reactions across the country.

On Monday, November 28, the global markets have come under pressure with investor anxiety rising. The effect is prominent in the crypto space as well with the broader crypto market falling 3% in the last 24 hours.

The world’s largest crypto Bitcoin is down by nearly 3% trading at $16,180 levels. On the other hand, altcoins like Ethereum (ETH), BNB, XRP, Polygon (MATIC), etc. are all down by 4-8%.

The recent unrest in China might exploit the vulnerability in the crypto markets that have been already spooked by the collapse of the crypto exchange FTX this month. Over the last month, Bitcoin and the broader crypto space are already down by 20%.

today’s drop in the crypto market has followed the correction in Asian equities and U.S. equity futures. Speaking to Bloomberg, Katrina Ell, senior economist at Moody’s Analytics Inc., said: “One risk in China is that Beijing’s ongoing policy of Covid-zero mobility curbs is an impediment to stabilizing domestic demand”.

As said Bitcoin is already down by 20% this month in November. It has been the assets’ worst monthly performance since June 2022. This also marks the worst November on record for Bitcoin so far. Concerns have been brewing that another major crash trigger could lead Bitcoin to fall up to $5,000.

Along With China, Fear Grows Around Wrapped Ether

Cryptocurrency watchers across the globe have also shared concerns over wrapped Ether, which is supposedly losing its peg to the actual Ether (ETH) token. The concerns stemmed from the Twitter joke posts that falsely claimed a break in the expected peg between wETH and Ether.

Markus Thielen, head of research and strategy at crypto lender Matrixport, however, said that they are “not too concerned” with the wETH. Thielen said that the wrapped Ether is based on smart contracts. He added:

“This will make it unlikely to be actually manipulated as no person, nor a 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 is looking to raise $100 million at a $1.5 billion valuation.