What happened
Top altcoins are making strong recoveries after getting hit hard earlier in the week. Solana (SOL -6.17%), Avalanche (AVAX -7.16%), and Algorand (ALGO 0.38%) were up roughly 2.4%, 8.7%, and 9.2%, respectively, on Thursday as of 6 p.m. EDT.
Concerns that China Evergrande will default on its debt sent shockwaves through both equity and cryptocurrency markets on Monday. The real estate giant has more than $300 billion in debt, and investors reacted to fears that a default would have far-reaching effects that could disrupt stablecoins including Tether and ultimately the broader crypto space. However, it looks like those fears may be dissipating.
Image source: Getty Images.
So what
Pricing gains for Solana, Avalanche, and Algorand's respective tokens on Thursday appear to be largely driven by recovery momentum for the broader crypto market. It's still not out of the question that China Evergrande defaulting on its debt could have some ripple effects in the space, but the overall market's current read is that potential contagion spillover will be more limited than initially suspected.
Now what
In addition to pursuing explosive gains, some investors have turned to cryptocurrencies as a potential haven in the event of stock market crashes, economic pressures, and political instability. However, the recent sell-off stemming from concerns about the China Evergrande situation may raise some doubts about that thesis.
Solana, Avalanche, and Algorand have seen significant recovery thanks to momentum on Thursday, but the recent volatility for the broader crypto space highlights the fact that their tokens aren't trading in a vacuum. Investors may still be able to notch big gains with top cryptos, but they should move forward with the understanding that there's still plenty of risk in the equation.
