Celsius Network Prepares to Unstake $465 Million Worth of Ethereum to Compensate Creditors
Celsius Network, the bankrupt cryptocurrency lending company, is getting ready to unstake approximately $465 million worth of Ethereum (ETH) as part of its efforts to compensate creditors. This move comes after the company filed for bankruptcy in July 2022, leaving creditors waiting for financial recompense for 18 months.
Celsius Ensures Liquidity for Creditor Compensation
Celsius has decided to unstake a significant amount of ETH to ensure liquidity for creditor compensation. The company’s official announcement highlights the strategic nature of this move:
“In preparation of any asset distributions, Celsius has started the process of recalling and rebalancing assets to ensure ample liquidity. Celsius will unstake existing ETH holdings, which have provided valuable staking rewards income to the estate, to offset certain costs incurred throughout the restructuring process. The significant unstaking activity in the next few days will unlock ETH to ensure timely distributions to creditors.”
Is Celsius Responsible for Over 86% of ETH in Exit Queue?
According to blockchain analytics firm Nansen, Celsius currently possesses around one third of the total Ether in the unstaking exit queue, totaling around 206,300 ETH or $465 million. So far, Celsius has already withdrawn over 40,249 ETH.
An on-chain data analyst at 21.co elaborated on the situation, stating that 352,000 ETH (54.7%) waiting to be withdrawn belongs to Figment and 206,000 ETH (32%) belongs to Celsius. It is likely that Figment’s withdrawal also belongs to Celsius since they previously redeemed stETH from Lido and restaked ETH via Figment.
Ethereum Price Crash Unlikely
While there are concerns that the release of a large volume of tokens from staking could impact Ethereum’s price, others believe that the market is strong enough to handle it. The current ETH trading volume suggests that the market could absorb Celsius’ entire ETH holdings without a major price crash.
Celsius Allows Users to Withdraw 72.5% of Cryptocurrency Holdings
After receiving approval for its settlement plan, Celsius has allowed eligible users to withdraw 72.5% of their cryptocurrency holdings until February 28. According to court documents, approximately 58,300 users possess a total of $210 million in assets classified as “custody assets.”
Ethereum Price and Consolidation Range
At press time, ETH traded at $2,250. The 1-week chart for ETH/USD shows that the price of Ethereum has formed a consolidation range between $2,125 and $2,441 over the past five weeks.
Hot Take: Ethereum Market Poised to Absorb Celsius’ Unstaking Activity
Celsius Network’s decision to unstake a significant amount of Ethereum may raise concerns about its impact on the market. However, given the current liquidity and trading volume of Ethereum, it is unlikely to cause a major price crash. The market appears robust enough to absorb Celsius’ unstaking activity gradually. As Celsius focuses on compensating creditors, fear-mongering about an Ethereum price crash seems unnecessary.
By
By
By
By
By