The Celsius SAGA
What happened to the Celsius Network.
The market crashed on Mondays and the crypto market crashed & burned! But what happened?
US CPI numbers released on Friday did dump the markets but the second wave of sell-offs came with the rumors of Celsius network halting its services.
The downtrend began earlier on Monday after the leading platform announced that all withdrawals and trade is suspended on the platform, where crypto market cap fell below $1 trillion.
What is Celsius?
A lending platform that is known for its high-yield offer on crypto deposits. The CeFi platform lends money to crypto firms. According to the official website, Celsius has over 2 million community members, and it has over $11 billion in assets as of 17th May 2022.
Why is Celsius in trouble?
The downfall of Celsius was contributed by several factors, including the move of halting services that were announced on Monday.
Importantly, the factor that started the meltdown was Terra’s crash, which had led to an increase in withdrawals on the platform.
In addition, the hacks and exploits that the platform’s funds were subjected to had only caused more trouble. All this had resulted in several crypto investors questioning the platform’s liquidity.
Moreover, the instability of staked ETH on Lido Finance only spelled more bad news for the platform. This was because Celsius has a whopping $1.5 billion in stETH, most of which was put as collateral on Aave. And by doing so, Aave has incurred a debt of $1.2 billion. Several saw this move as a last-ditch effort to meet the liquidity problem on its platform.
What happened to the Crypto Markets?
The timing of Celsius halting services was bad as the market was struggling to maintain important support areas and panic caused by the celsius debacle just added fuel to the fire we saw BTC hit $20,800 and ETH as low as 1120$ on some exchanges, back to Dec 2020 prices!