Bitcoin was trading at $23,419 after dipping as low as $23,337 earlier
As reported by Chinese reporter Colin Wu, an address (0x87A67e7dC32fdc79853D780c6f516312b4A503B5), suspected to belong to Celsius, borrowed 278 million DAI in the Maker Protocol by staking 17,919.37 Wrapped Bitcoin (WBTC) worth nearly $444 million. It would be the most important personal debt of the protocol. If BTC falls to $22,584, the position could be liquidated, according to Wu.
Wrapped Bitcoin (WBTC) is a token that represents Bitcoin on the Ethereum network and maintains an equal price with Bitcoin.
At press time, Bitcoin was trading at $23,419 after dropping to $23,337 earlier. Apart from that, an economic intelligence company, MicroStrategy, could face its first margin call if the price of Bitcoin falls below $22,584.
In May, MicroStrategy’s CFO, Phon Le cited the potential of receiving a margin call at $21,000 on the company’s massive BTC position. According to MicroStrategy CEO Michael Saylor, Bitcoin might need to dip beneath $3,562 for it to post more collateral for its $205 million debt.
In March, MicroStrategy took out a $205 million bitcoin-backed loan with Silvergate Bank to buy more bitcoin.
Celsius pauses withdrawals, contagion spreads to other protocols
After weeks of skepticism over the durability of the outsized returns given by the DeFi lending platform, Celsius network halted withdrawals, swaps and transfers, prompting a global cryptocurrency sell-off. Bitcoin plummeted about 15% to its lowest level since December 2020, and other major cryptocurrencies such as Ethereum also tumbled severely.
After the implosion of the Terra ecosystem in May, doubts about the exorbitant rates surrounding products like those provided by Celsius grew. According to its website, the CEL token promises “real financial rewards”, including up to 30% additional weekly returns.
On Monday, Celsius rivals Aave, Curve DAO token and Lido DAO all dropped 21.3%, 25.20% and 32%, respectively, as tokens tied to lending and borrowing protocols underperformed.
