Is Celsius’ Ethereum Dumping Spree Cause for Concern?
Since gaining approval for its restructuring plans in November 2023, Celsius, a bankrupt crypto lender, has continued to deposit significant amounts of Ethereum (ETH) to various exchanges. This ongoing dumping spree has led to concerns among market participants about potential sell-offs and the impact it may have on the market.
Celsius Strikes Again?
In the past 24 hours alone, Celsius has sent an additional 18,000 ETH, worth approximately $40 million, to Coinbase. This brings the total ETH transferred by the firm to exchanges, including FalconX and OKX, since the approval of its restructuring plan, to about 281,000 ETH, or $621 million. With Celsius currently holding at least 550,000 ETH, valued at over $1.2 billion, market participants are understandably worried about the continued sell-off.
Despite these concerns, it is unlikely that Celsius will sell all of its ETH holdings. As part of its approved restructuring plan, the firm is committed to settling creditor claims, including allocating an estimated $2.1 billion to retail customers in a mix of liquid crypto assets like Bitcoin (BTC), ETH, and Tether (USDT). This suggests that Celsius may not be offloading all of its exchange deposits, particularly those held on Coinbase, which is named as a distribution partner in the restructuring plan.
When Will Distribution Start?
While the exact timeline for asset distribution to creditors and customers is still uncertain, there are speculations that it could begin as early as the end of January 2024. Once the distribution process starts, it will mark a significant milestone in Celsius’ journey to exit bankruptcy, which is expected to be completed by Q1 2024.
It’s important to note that Celsius was once a leading crypto lender valued at over $3 billion. However, following the collapse of the crypto market and revelations of financial discrepancies and risky management practices, the firm was revealed to be deeply insolvent. Despite its troubled past, Celsius continues to attract attention in the industry due to its ongoing dumping of Ethereum.
On the Flipside
Former Celsius customers have expressed concerns about the capabilities of US Bitcoin, the firm assigned to manage the new creditor-owned Bitcoin mining firm. Some argue that the firm is currently in a weakened financial position, which raises doubts about its ability to effectively handle the mining operations and generate profitable returns for the creditors.
Why This Matters
Celsius’ continuous dumping of Ethereum onto exchanges has raised concerns among investors about potential selling pressure on the asset. As the firm proceeds with its asset distribution plans, market participants will closely monitor the impact it may have on the market and whether it will exacerbate the recent volatility in the cryptocurrency space.
This article is for information purposes only and should not be considered trading or investment advice. It is important to conduct thorough research and seek professional advice before making any investment decisions. Trading cryptocurrencies and other financial instruments carry a high level of risk and may result in significant financial loss.
Analyst comment
Neutral news: Celsius’s ongoing dumping of Ethereum onto exchanges has raised concerns among investors about potential selling pressure on the asset. However, as part of its approved restructuring plan, the firm is committed to settling creditor claims, suggesting that it may not sell all of its ETH holdings. The timeline for asset distribution is uncertain but could begin by the end of January 2024. Market participants will closely monitor the impact of Celsius’s actions on the market and recent volatility in the cryptocurrency space.
