After the Celsius Network’s decision last month to freeze all transactions and withdrawals, the whole cryptocurrency market plummeted into a deep and gloomy sinkhole.
This week there was some good news, when Celsius paid off its remaining $41.2 million debt to the DeFi protocol MakerDAO. This payment allowed Celsius to release $448 million in collateral.
However, it appears that this will be the only positive development from the U.S. crypto lender in the coming days or months.
After weeks of conjecture and hearsay, Celsius’s legal counsels have formally informed regulators that the cryptocurrency lender has filed for Chapter 11 bankruptcy protection.
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CEL Loses Half Its Value After Bankruptcy News
Following the disclosure of bankruptcy, CEL, the native cryptocurrency of Celsius Networks, lost half of its value from its intraday high of 95 cents and down to 45 cents.
In the last month, there has been an increase in the number of cryptocurrency-related failures. After the crypto hedge fund Three Arrows Capital and the crypto lender Voyager Digital, Celsius becomes another domino to fall in the bankruptcy abyss.
Since June 20, the price of CEL has nearly grown four-fold due to what appears to be a fervor caused by futures and derivatives traders. CEL rose from $0.28 on June 15 to $1.56 on June 21, a 456 percent increase compared to the market’s 12.36 percent increase during the same timeframe.
In May, Celsius had only $12 billion in assets, which was about half of what it had at the start of the year. After that, the firm ceased revealing its assets under management (AUM).
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BTC total market cap at $378 billion on the daily chart | Source: TradingView.com
Celsius Was A Crypto Industry Powerhouse
CEL remains under pressure to the downside as it trades roughly 80% below its April 2018 high of $8.
At its prime, Celsius was a cryptocurrency industry titan. It had more than 1.7 million users worldwide and assets of more than $20 billion. The company achieved success as a result of offering investors yields in the range of 18 percent.
What then happens to the CEL token? The value of CEL has decreased significantly since Celsius ceased operations. This does not, however, imply that the token will plunge to zero. Indeed, it could garner renewed attention from pump-and-dump traders.
Meanwhile, Celsius asserts that it has $167 million in ready cash, which will be used to support some operations “during the reorganization process.”
Featured image from CoinQuora, chart from TradingView.com