Celsius’s bankruptcy-induced liquidation plans could pressure overall crypto market: Kaiko

admin July 10, 2023

0 1 minute read

A plan to liquidate altcoins held by bankrupt financier Celsius into Bitcoin (BTC) and Ethereum (ETH) could put more pressure on the cryptocurrency market, according to a July 10 report. report From blockchain analytics company Kaiko.

Kaiko noted that the liquidity of most of the altcoins held by Celsius has registered a significant decline over the past year, ranging from 6% to as high as 84%.

“The total market depth of Celsius altcoin holdings has fallen by 40% since 2022, with a total of around $90 million in early July.”

According to the graph below, only Litecoin (LTC), Bitcoin Cash (BCH), Polygon (MATIC), and Aave (AAVE) have seen a noticeable change in their liquidity situation over the past year. Others almost decreased.

Source: Silkworm

BCH and LTC, in particular, saw a surge in liquidity conditions after traditional financial institution-backed cryptocurrency exchange EDX enabled support in June.

The company also noted that Celsius has over $90 million in total altcoin holdings, “which means it will be difficult for the company to liquidate without experiencing significant price slippage.” . He further added:

“Over 60% of the altcoin market depth is concentrated on Binance and other offshore exchanges, with 30% on US exchanges.”

CEL token liquidity is almost non-existent

Kaiko said Celsior is facing problems due to the lack of liquidity in its most important altcoin holding, CEL.

CEL is the native token of Celsius and accounts for nearly 65% of the bankrupt company’s total altcoin holdings.

“There is virtually no liquidity in CEL in terms of market depth, mostly concentrated in OKX and Bybit, and the market depth has collapsed to just $30,000.”

Since Celsius filed for bankruptcy, interest in the company’s native token has waned, with its value peaking above $8 in 2021 before dropping to less than $1, the paper said. . of crypto slate data.

Celsius’ post-bankruptcy liquidation plans could put pressure on the entire crypto market: Kaiko makes his first appearance on CryptoSlate.