Celsius Network’s Sale of ETH Worth $1 Billion to CEXs: Anticipating Market Response
Celsius Network, a prominent cryptocurrency platform, has made headlines as it faces bankruptcy and executes significant transfers of Ethereum (ETH) to various exchanges. This surprising development has caused a stir in the cryptocurrency world, and here is an overview of how the market has responded to this news.
According to a report by Spotonchain, Celsius Network deposited a staggering 443,961 ETH, valued at over $984 million, into wallets belonging to Coinbase Prime, Paxos, and FalconX on January 25. This followed a transfer of 575,081 ETH on January 24. Arkham, a blockchain intelligence firm, revealed that within the span of an hour, 13 transactions sent this substantial amount of ETH to Coinbase and Paxos accounts. Despite its significant Ethereum reserves, Celsius Network is still working to repay its creditors.
The motivation behind these large-scale transactions seems to be Celsius Network’s strategic move to ensure sufficient liquidity during its restructuring process. As indicated by the “Celsius NewCo Community,” the company is preparing to distribute assets to its creditors, a process that is expected to commence in mid-February and span a year. This distribution is a critical step in the bankruptcy proceedings.
Reports from Celsius users indicate that they have successfully withdrawn their assets from the platform. The company is taking steps to unlock its Ethereum holdings by unstaking them, facilitating timely distributions to creditors. Currently, Celsius holds 540,029 Ethereum, worth $1.2 billion. However, recent data from Arkham Intelligence reveals that Celsius sold over $125 million worth of ETH between January 8 and 12, as a strategy to meet its debts and bankruptcy requirements.
While the exact reasons for these transfers have not been explicitly stated, Spot on Chain speculates that they might be related to an over-the-counter (OTC) deal. Celsius has previously mentioned utilizing corporate accounts to distribute cryptocurrencies through platforms like Coinbase. For non-corporate accounts, the distribution plan involves using PayPal for creditors in the United States and Coinbase for those outside the country.
In terms of the impact on ETH price, Ethereum currently stands at $2,259, experiencing a 1.42% increase in the last 24 hours. However, over the past week, it has declined by 11.33%. The trading volume of ETH has also slightly decreased in the last day, totaling $14.3 billion. These significant movements are causing uncertainty among crypto investors, and it is unclear how they will further affect price barriers. Speculation suggests that ETH may continue to decline as it grapples with a massive liquidity crunch.
In conclusion, the news of Celsius Network’s bankruptcy and its substantial ETH transfers has sent shockwaves through the cryptocurrency market. The company’s actions to ensure liquidity during its restructuring process and its plans to distribute assets to creditors have garnered attention. The impact on ETH price is uncertain, but the market is closely monitoring the situation.