Pessimism continues in cryptocurrencies and Bitcoin falls below $17,000

Since the beginning of the year, the Bitcoin accumulates a decrease of almost 65%.

Among the reasons is the very context of the real economy, with cryptocurrencies being dragged along -along with stock market shares- by the monetary policy tightening of central banks such as Federal Reserve, This makes safer assets like Treasuries more attractive.

But the uncertainty of the sustainability of the sectorafter the fall of FTX last month, caused strong mistrust.

the analyst Noelle Acheson He pointed out, in dialogue with the Bloomberg agency, that “there may still be other ugly news related to contagion” in the sector, but that “most investors who were going to sell their holdings have already done so“.

One of the biggest targets is the main exchange platform Binance, a rival at the time of FTX.

In the last week the firm suffered a run on more than $6 billion in cryptocurrency depositsa situation that worsened after Mazars Groupan accounting firm, halted its audit work on Binance and other cryptocurrency firms.

Companies seek, by hiring these firms, to demonstrate to their clients that they have enough reserves to cover any run and that it is possible to trust them.

This is reinforced by the fact that, contrary to traditional finance, In the world of cryptocurrencies there is no entity capable of stopping the contagion and exerting some kind of rescue.

However, for michael burryan investor renowned for predicting the 2008 subprime crisis, these audits “have no meaning”and recalled on his Twitter account that, in 2005, before the crisis broke out, accounting firms still could not recognize the risks that existed behind some instruments.

Binancerepeatedly, argued that, unlike FTX, it does not misuse user depositswhich has “one by one” backups of them and a US$1 billion emergency fund; and that it has already survived several “cryptocurrency winters”, including an 80% drop in Bitcoin between December 2017 and the end of 2018.

However, Mazars’ retirement as auditor leaves Binance without any backing for his claims, and now he will have to look for another firm, in a context where accounting firms avoid tying up with crypto companies.

“I don’t think Binance is trying to cause trouble, but the company is now a risk to all of us.. Any time there is a player controlling a substantial volume, there are many systemic risks,” he analyzed. Mark Lurieco-founder of Shipyard Software, developer of decentralized exchange platforms.

It is that Binance, after the fall of FTX, increased its market share to 52.9%the largest in its history, according to data from CryptoCompareand an eventual fall could be “catastrophic for the cryptocurrency industry and for all users who use it,” as assessed this week by the US senator for the State of Tennessee, Bill Hagerty.

The company also faces another front when being investigated by the Department of Justice and the US Treasury (IRS) for alleged money laundering and tax evasion.