The crypto lender Celsius is authorized à sell the altcoins en sa possession to invest in BTC and ETH as part of its restructuring. These sales could exercise a pressure on the courses from tokens.
Unlike Voyager Digital, liquidated, Celsius intends to successfully complete its restructuring after its bankruptcy in 2022. As part of this process, the company has obtained court approval to proceed with token sales.
At the end of March, Celsius held more than 2 billion dollars at BitcoinEthereum and stETH, the token of the Lido staking protocol. But the restructuring company also holds altcoinsliquid and illiquid.
Altcoins down from -6% to -84%.
Celsius plans to divest these altcoins in order to convert them into liquid tokens such as BTC and ETH. To this end, part of its capital would have been transferred to the market maker Wintermute and Paxos.
For Kaiko, these forthcoming divestments are likely to have a major impact on the company’s business. bearish effect on altcoins concerned. The blockchain analysis player points out that with rare exceptions, including Bitcoin Cash (BCH) and Litecoin (LTC), tokens in Celsius’ possession are down sharply year-on-year.
The decline in altcoins ranged from -6% to -84%. Visit CELwhich alone accounts for over 65% of Celsius assets, is down 83%.
Only the SRM does worse at -84%. Significant sales of these altcoins could therefore further degrade their performance.
Market depth limits painless sales
Although there are no details on buying and selling rates or execution venues, the impact on the market could be significant, especially considering that liquidity for these tokens has plummeted over the past year,” believes Kaiko.
Yet the “aggregate market depth for Celsius altcoin holdings has declined by 40% since 2022, totaling around $90 million at the beginning of July,” the analysis report further details.
According to documents provided by Celsius, the value of altcoins held by the company well over $90 million. This “means that it will be difficult for the company to liquidate them without suffering a significant price slippage “. For indeed :
Over 60% of the altcoin market depth is concentrated on Binance and other offshore exchanges, while 30% is on US exchanges.”
Short-term bearish pressure on altcoins
And Kaiko reminds us that the main issue is the CELthe native Celsius token.
There’s virtually no liquidity for CEL, as evidenced by the depth of the market, which has collapsed to just $30,000, concentrated mainly on OKX and Bybit.”
Celsius is said to hold 240 million dollars worth of CELtokens that have become unmarketable in practice.
More broadly, Kaiko considers that due to poor liquidity conditions, “the Celsius altcoin liquidations could exert a pressure on the crypto markets at short-term “. Bitcoin, on the other hand, is unlikely to be affected.
The correlation between Bitcoin and altcoins has decreased in the first half of 2023 compared to the same period last year,” notes Kaiko.
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