Type Here to Get Search Results !


Investors are scared other parts of the crypto market could get floored if Celsius collapses.

Latest Updates Google News Click Here

 A liquidity crisis at cryptocurrency lending firm Celsius has investors worried about a broader contagion that could bring down other major players in the market.

Celsius recently moved to pause all account withdrawals, sparking fears that it may be about to go bust. The company lends out clients’ funds similar to a bank — but without the strict insurance requirements imposed on traditional lenders.

Bitcoin sank below $21,000 on Tuesday, extending sharp declines from the previous day and sinking deeper into 18-month lows. The total value of all digital tokens combined also dipped below $1 trillion for the first time since early 2021, according to CoinMarketCap data.

Crypto investors fear the possible collapse of Celsius may lead to even more pain for a market that was already on shaky ground after the demise of $60 billion stablecoin venture Terra. Celsius was an investor in Terra, but says it had “minimal” exposure to the project.

Celsius did not return multiple CNBC requests for comment.

“In the medium term, everyone is really bracing for more downside,” said Mikkel Morch, executive director of crypto hedge fund ARK36.

Read more about tech and crypto from CNBC Pro

Fund manager reveals his crypto shorts — and one is already down more than 25% this week

Bitcoin could be leading equity markets lower as crypto is gauge of investors’ overall risk appetite

Crypto investments will be a ‘big zero’ in the end, says value investor Mohnish Pabrai

Wells Fargo says Silvergate Capital is a buy even as crypto prices sink

“Bear markets have a way of exposing previously hidden weaknesses and overleveraged projects so it is possible that we see events like last month’s unwinding of the Terra ecosystem repeat.”

Monsur Hussain, senior director of financial institutions at Fitch Ratings, said a liquidation of Celsius’ assets would “further rock the valuation of cryptoassets, leading to a wider round of contagion within the crypto sphere.”

Celsius has a large presence in the so-called decentralized finance space, which aims to recreate traditional financial products like loans without the involvement of intermediaries like banks.

Celsius owns numerous popular assets in the DeFi world, including staked ether, a version of the ether cryptocurrency that promises users rewards on their deposits.

“If it goes into full liquidation mode, then it will have to close out these positions,” said Omid Malekan, an adjunct professor at Columbia Business School.

USDD, a so-called stablecoin that’s meant to always be worth $1, fell as low as 97 cents Monday, echoing the woes of Terra’s UST stablecoin last month. Justin Sun, the coin’s creator, accused unnamed investors of “shorting” the token and pledged $2 billion in financing to shore up its dollar peg.

Post a Comment

* Please Don't Spam Here. All the Comments are Reviewed by Admin.

Top Post Ad

Below Post Ad

Ads Area