Crypto Markets In Chaos: Bitcoin And Ether Stagnate As Recession Fears Swell

3 - 4 minute read

Cryptocurrency markets experienced a period of volatility on Monday morning in Asia, with Bitcoin and Ether both seeing little change in value. This followed a slump over the weekend, which came after a week of concerns about a potential global recession and the stability of cryptocurrency exchanges. However, the BNB token of the Binance exchange managed to regain some lost ground, while other cryptocurrencies in the top 10 list by market capitalization saw mixed or little change.

According to CoinMarketCap data, Bitcoin lost 0.15% to reach $16,773 in the 24 hours leading up to 8am in Hong Kong, having fallen below the $17,000 support line over the weekend. Ether saw a dip of 0.18%, reaching $1,168. The total cryptocurrency market capitalization saw little change in the last 24 hours, increasing by 0.07% to reach $810.53 billion, while trading volume fell by 37.54%.

On Friday, accounting firm Mazars Group, based in Paris, suspended its work reviewing the assets and proof of reserves of global cryptocurrency exchanges, including, Kucoin and Binance. A spokesperson for Binance told CNBC that the firm was concerned with “the way [proof-of-reserves] reports are understood by the public,” and added that the reports were not audits. Mazars has yet to release a public statement on the suspension, but the move added to market jitters about the risks surrounding cryptocurrency exchanges, following the collapse of last month amid allegations of misappropriation of client funds.

As a result of the Mazars development, Bitcoin fell 4.5% to trade as low as $16,584 over the weekend, while Ether lost 7%. BNB saw a slump of 16% on Saturday, but recovered by around 4.13% to reach $252 on Monday morning. Clients reportedly withdrew billions of dollars from the Binance exchange last week.

In the traditional financial markets, US equities finished lower on Friday, with the Dow Jones Industrial Average losing 0.85%. The S&P 500 Index fell 1.11% and the Nasdaq Composite Index dipped 0.97%. These declines came after the US Federal Reserve raised interest rates by 50 basis points on Wednesday, bringing them to a 15-year high of between 4.25% and 4.5%. Fed Chair Jerome Powell announced that further rate hikes were ahead, adding to concerns about a potential global recession. The Fed had previously raised rates by 75 basis points in four consecutive meetings, as part of a campaign to lower inflation in the US economy. It started tightening monetary policy in March, raising rates from near zero to 3.75% to 4%, and has indicated that rates may eventually exceed 5%.

The latest US consumer price index showed that inflation was up 7.1% in November compared to the previous year, but lower than the 7.3% forecast by Trading Economics. The CPI has shown a steady decline from 7.7% in October and 8.2% in September.

Disclaimer: The content in this article is provided for informational purposes only and should not be considered as financial or trading advice. We are not financial advisors, and trading carries high risk. Always consult a professional financial advisor before making any investment decisions.

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