The post Celsius Network On the Verge of Bankruptcy? Will the Crypto Space Crash Amid the fear of Liquidating Another 18K BTC appeared first on Coinpedia – Fintech & Cryptocurreny News Media| Crypto Guide
The Celsius Network has dropped more than 50% since the early trading hours and the platform quickly halted the transfers & withdrawals within no time. Additionally, the staking & lending platform is also rumoured to have transferred nearly $250 million worth of Wrapped Bitcoin(wBTC), Wrapped Ether(wETH) and other assets, from Aave to the FTX exchange.
As previously, Bitcoin has been severely impacted by the LUNA-UST peg, now Ethereum is feared to lose hefty value, if the CEL token continues to drop. Similar to the LUNA-UST-ANC crisis, ETH-stETH & CEL crisis has now dragged the global crypto market cap below $1 trillion now.
Celsius network directly owns more than 330 million CEL directly and with the prices dropping hard, more than $150 million has been whipped out from the company’s balance sheet. Moreover, multiple companies have exposure to Celcius Network. Tether, where more than $1 billion is lent to Celcius, NuriBanking which sends all its funds to Celcius & Gemini, where Celcius claimed to hold nearly $100 million GUSD. While Voyager is also suspected to be on the list, the CEO of the firm has squashed all the claims.
The current market conditions may be extremely dreadful as more blood-bath on the crypto street are still expected here-on. Mainly due to the fact that Celcius Network still holds 17,919 wBTC leveraged in Maker Protocol.
The main concern currently is the base rate of these leverage tokens which lies around $22,584 which is very close to the current price of $24,000. If the BTC price plunge at the same pace, then the leveraged Bitcoin could just be liquidated automatically after hitting the base price.
On the other hand, Celsius Network also holds multiple other assets and the fear of steep falls also haunts their rallies. Celsius Netwrok has made its 27% of ETH insolvent while the other 73% of its ETH is staked under ETH 2.0. And hence if the merger happens amid the current market condition, then the staked Ethereum may also possess a huge risk of liquidation.