Could Celsius Altcoin Sell-off Lead to Polygon (MATIC), Cardano (ADA), Chainlink (LINK) Price Plunge?
Celsius announced sale of customers' altcoins in exchange for Bitcoin and Ethereum. News sparks stakeholder panic | Credit: Shutterstock
- Celsius announced the sale of customer altcoins in exchange for Bitcoin and Ethereum
- Custody and Withhold accounts will not be affected
- The announcement sparked panic among stakeholders currently holding altcoins
Failed crypto lender Celsius announced a revised plan for its company solution, showing plans of selling off altcoins on customers’ accounts in exchange for Bitcoin and Ethereum. But, how will this affect the value of altcoins such as MATIC and ADA?
Fire Sale
Celsius, which is about to be acquired by Fahrenheit, has announced its plans to sell “all altcoins from all customers (except Custody and Withhold accounts)” starting July 1st and replacing their values with Bitcoin and Ethereum.
Celsius also released information on the amounts of altcoins it currently holds in customers’ accounts, including MATIC, ADA, and LINK:
- $CEL: $70M
- $MATIC: $52M
- $ADA: $26M
- $LINK: $17M
- $LTC: $14M
Naturally, such a huge altcoin dump is bound to influence the value of the altcoins in question. Many stakeholders are expressing their distress regarding the imminent sharp drop in the altcoins’ values. The huge sale will likely push altcoin holders to start selling their tokens on exchange platforms, such as Binance and Coinbase.
What Happened To Celsius?
On July 13th, 2022, Celsius filed for Chapter 11 bankruptcy protection, with only $167 million in liquidity. In preparation for filing for Chapter 11 bankruptcy, Celsius froze its users’ accounts in June 2022, claiming the main cause was “extreme market conditions.”
The judge residing on the bankruptcy case decided that Celsius will return only $44 million of what it held in its clients’ accounts. The $44 million were in what the lender called “Pure Custody” accounts. Holders of these accounts deposited their crypto assets into Celsius’ vaults, with no intention to profit from them.
Although Custody accounts held over $200 million in assets, the majority of the funds were interests from the company’s Earn system. The Earn system enabled clients to invest their assets with Celsius, receiving around 20% annual interest.
At the height of Celsius’ operations, the company raised over $900 million in funding and held assets of over $4.5 billion. However, following the crash, Celsius filed for Chapter 11 bankruptcy and received offers of acquisition from several companies. The bid winner, Fahrenheit would take over all Celsius assets, including a loan portfolio, staked crypto, mining operations, and other investments currently held by Celsius.
