MICA RESEARCH】U.S. Stocks Switch to Recession Topics, Crypto May Be Affected
It was a tumultuous week for global financial markets, with the U.S. Department of Labor's lower-than-expected price index (CPI) announcement on Wednesday spurring a surge, followed by Thursday's Fed rate hike decision and a sharp recession in the retail index, as well as the currency exchange reserve controversy being brought to the forefront again and even making headlines in the Wall Street Journal. The price of Bitcoin fell from $17,800 to $16,500, and Ether approached $1,200 again.
The crypto market is not in good shape, as user confidence has not recovered after the FTX incident, and concerns about centralized exchanges have not been dispelled. This will only worsen the already poor liquidity of the market.
Mazars has issued an open letter for Coin Securities, revealing its current balance sheet and liabilities, however, they also stressed that they do not issue an opinion on this, and the open letter is not an official audit report. Mazars also stopped working with Crypto[dot]com and Kucoin, seemingly in an attempt to stop the crypto industry-related auditing business, and even removed the public statement from the official website of Coinan.
This means that Mazars is not willing to continue to endorse its auditing operations for the cryptocurrency industry for no other reason than that they do not have access to the true asset position, making the risk of licensing too high, but the other two firms, Armanino and KPMG, are still providing PoR reporting and auditing services to exchanges.
In the short term, the crypto market is unlikely to recover. Even though U.S. stocks are moving up and down by more than 10%, bitcoin is still only trading between $16,000 and $18,000, with a range of only about 5%, indicating that market volume is low and the crypto market is not overly shorted or oversold.
The crypto market is falling because the industry is suffering from a real damage of confidence and broken capital chain, which needs a longer time to repair. Let's take a look at the current situation with a little reasoning.