The failed crypto platform Celsius

They wanted to save the failed crypto platform Celsius, but in the end they changed their minds. Why?

The day before, the CEO of the FTX crypto exchange, Sam Bankman-Fried. Said that he was ready to support promising companies in the industry. They are facing difficulties due to the market fall. It turns out that FTX even considered making a deal with the Celsius platform. Which was on the verge of bankruptcy and earned the dislike of users against the backdrop of blocking the withdrawal of coins. However, according to insiders, the deal never took place. Moreover, due to the fault of the latter company. Let’s talk about the situation in more detail.

However, in mid-June 2022, the platform faced major challenges. In short, decoupling the rate of the synthetic asset weth price from the original ether made it unprofitable to withdraw user coins from the platform. That is, in fact, the company had to report its own money for various operations. While the ethers of clients remain blocked in the Ethereum 2.0 network. Because it is still impossible to withdraw them from there.

What’s going on with crypto companies?

FTX has entered into discussions with Celsius management for a financial backing or acquisition. However, according to insiders, the platform management decided to abandon this idea after studying the financial situation of Celsius. In particular, a $2 billion “hole” was found in Celsius’s balance sheet , so FTX felt that the company would be difficult to deal with. Representatives of Celsius have not yet commented on the situation in response to a request from The Block journalists .

As we noted, as of June 12, Celsius has suspended withdrawals from its platform due to “extreme market conditions.” For several weeks now, the funds of the company’s clients have been essentially frozen. This is a serious problem that threatens to be a big scandal – as of May, Celsius claimed 1.7 million active customers and $ 12 billion of funds under management. Most likely, users cannot get to most of this amount now.

What is most interesting, all this time the company has practically not made any statements. The last message from her on social networks was posted on June 19 – then Celsius promised to “continue to stabilize liquidity and operational activity.”

Celsius’ problems can only get worse given the unfavorable situation in the crypto market. Yesterday , Bitcoin once again fell below the $20,000 line without significant support from buyers. Today it will continue to be in this price range.

Crypto companies

The collapse coincided with the negative dynamics in the US stock market, with which the crypt is very strongly correlated, that is, connected. According to analysts, the S&P 500 fell 1.8 percent on the day, which is historically a fairly large spurt.

But the dollar index, which shows the strength of the currency against a basket of the most popular foreign currencies, xwp price is approaching new records. At the time of writing, it is only 0.2 points from its high since 2002. Accordingly, other dollar-denominated assets are quite predictably depreciating.

It is also worth noting the growth of the PCE index in the US, that is, the implicit consumer price deflator. It indicates a significant increase in inflation in the country.

As a result, the news here is disappointing – the situation in macroeconomics is unlikely to “allow” the formation of a new bull run in the cryptocurrency market. At the same time, it gradually moves into the accumulation phase, which traditionally was used by investors.

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