The Celsius network has fallen over 50% since the first hours of trading and the platform quickly halted transfers and withdrawals in no time. Additionally, the staking and lending platform is also said 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.
The Celsius Network directly owns over 330 million CELs and with the fall in prices, over $150 million has been removed from the company’s balance sheet. In addition, several companies have exposure to the Celsius 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 believed to be on the list, the firm’s CEO has crushed all 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 right now is the base rate of these leveraged tokens which is around $22,584 which is very close to the current price of $24,000. If the price of BTC dips at the same pace, the leveraged Bitcoin might just automatically liquidate 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.
