- Celsius Network has started working on its restructuring plan.
- Market participants are worried that the bankrupt crypto lender could put downward pressure on the market.
- Given the Bitcoin ETF hype, institutions could likely absorb the looming sell pressure.
Bankrupt crypto lender Celsius Network recently announced plans to recall and rebalance its crypto assets to ensure it has enough liquidity for potential asset distributions after a New York Bankruptcy bank green-lighted the company’s restructuring plan.
As part of this strategy, Celsius has started working on its plan to reimburse its creditors $2 billion in Bitcoin and Ethereum, along with company stocks of its new creditor-owned BTC mining company. While creditors welcome these steps, there’s a note of caution in the air.
Celsius Prepares for Restructuring
According to Arkham Intelligence, defunct crypto lender Celsius Network transferred over $125 million worth of ETH to major exchanges between January 8 and January 12. Data revealed that the lender had sent $96 million of its ETH holdings to Coinbase and another $30 million worth to FalconX.
As of the latest update, Celsius retains approximately 539,000 ETH, valued at around $1.38 billion, alongside 9,799 bitcoins worth $420 million. While the crypto lender grapples with its bankruptcy proceedings, market participants are concerned that Celsius could flood the market with large ETH volumes, putting downward pressure on its value.
Further intensifying concerns of a sell-off, FTX and its trading arm, Alameda Research, have also been in motion, moving crypto holdings worth $28 million to various exchanges, as per SpotOnChain.
Although the chances of a sell-off paint a worrying trend, given the upbeat conditions of the market, the selling pressure could be absorbed by institutions.
Sell-off Fears Obsolete Amid Rising Institutional Demand
Following the approval of the Bitcoin ETF on Wednesday, January 10, BlackRock, one of the world’s largest asset managers, has quietly gobbled up a staggering 11,500 bitcoins in just two days.
While it may not seem much at first glance, BlackRock ate up 13 days’ worth of fresh BTC in two days of its ETF’s existence. Although this is just one institution, should the Bitcoin ETF maintain its current prices, the growing demand could bring about a supply crunch, nullifying concerns about sell-offs from FTX and Celsius.
Adding to the intrigue, BlackRock hints at an Ether ETF in the future, further fueling demand for the reigning altcoin king. After BlackRock CEO Larry Fink endorsed the asset, ETH surged by 16%.
On the Flipside
- Most of FTX’s holdings will hit the market by 2025.
- Celsius has yet to specify when its creditors will start receiving funds.
- Celsius creditors have waited over 18 months to receive funds stuck on the platform since the firm declared bankruptcy in 2022.
Why This Matters
The crypto market is abuzz with anticipation for positive developments in 2024. However, concerns about potential selling pressures from entities holding significant amounts loom, potentially impacting market growth and performance.
GameStop bids farewell to the crypto industry:
GameStop Scraps NFT Marketplace, Cites Regulatory Uncertainty
Find out who’s dominating the Bitcoin ETF scene:
BlackRock & Fidelity Top Bitcoin ETF Inflow: $1B in Two Days
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