After Chinese stocks saw a day of red, the price of the virtual currency fell below $42,000 in the afternoon.
At one point, the ChiNext Index fell by nearly 4%, while the Shenzhen Component Index dropped by more than 3%.
A bigger than expected producer inflation rise in March may be one of the reasons for the fall, with it up 8.3% year over year.
Consumer inflation is below expectations, but still at 1.5%.
It is possible that consumer inflation is coming to China, or that producers are sucking up the cost, which would lower margins.
“I think the more notable fact is the big gap between CPI and PPI, and that indicates that pricing power amongst most companies in China is weak and they’re taking a hit on margins,” Ramiz Chelat, portfolio manager at Vontobel Asset Management, said on Monday.
While China comes under intense criticism for its policies, a return of lockdowns in the world’s second biggest economy is dimming the mood.
Real estate stocks are seeing the largest fall as the property market continues to unwind.
In addition, US treasury yields keep rising, indicating some flight to safety with China seeing the biggest drop since 2015, in foreign investors withdrawing from their bond market
During their Sunday afternoon, the price of bitcoin was $43,400. At 10PM euro time, its biggest drop occurred, with it falling to $42,000 and just below it during Shanghai trading.
It is rising a bit this morning in Europe, suggesting that China isn’t having much of an effect on it.
The correlation between US stocks and Shanghai remains to be seen, but eventually they will.
US futures are currently saying red, but that can change when the price of oil falls.
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