- Celsius received court approval to convert their alt holdings to BTC and ETH.
- The majority of altcoins that Celsius holds have seen their prices drop more than 60%.
- At press time, CEL was trading at $0.1578 after it gained more than 4% over the past 24 hours.
Bankrupt crypto lender Celsius has received court approval to convert its altcoin holdings into more liquid cryptos as part of its restructuring plan, according to the analytics platform Kaiko. In their latest report, the platform revealed that Celsius will convert its holdings into Bitcoin (BTC) and Ethereum (ETH).
In an effort to facilitate this process, the company has reportedly moved some of its holdings to market maker Wintermute and stablecoin issuer Paxos. However, the valuation of Celsius’ holdings in terms of USD remains unclear.
While Bitcoin Cash (BCH) and Litecoin (LTC) saw surges in June, fueled by the launch of the institutional exchange EDX, Celsius’ other holdings have suffered losses ranging from -84% to -6% over the past year. The CEL token, representing more than 65% of Celsius’ altcoin holdings, has experienced a decline of 83%, second only to SRM, which is down 84%.
The lack of information regarding buying and selling rates raises concerns about potential market impact, particularly given the decrease in liquidity for these tokens over the past year. The aggregated market depth for Celsius’ altcoin holdings has decreased by 40% since 2022, amounting to approximately $90 million as of early July.
Court documents reveal that Celsius holds altcoins valued significantly higher than $90 million, suggesting that liquidating them without experiencing substantial price slippage will be challenging. The CEL token poses a particular challenge as it suffers from extremely limited liquidity, with a market depth of just $20K, primarily concentrated on OKX and Bybit.
Daily chart for CEL/USDT (Source: TradingView)
Considering the poor liquidity conditions, the liquidation of Celsius’ altcoins has the potential to exert short-term pressure on the cryptocurrency markets. Over the past 24 hours of trading, the price of CEL climbed by more than 4%, which left the crypto trading hands at $0.1578, according to CoinMarketCap.
As a result, CEL was trading closer to its daily high of $0.1611 than its 24 hour low of $0.1516. Since CEL reached its all-time high of $8.02 in June of 2021, the price of the crypto has slipped by more than 98% to trade at its current level.
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