Celsius Initiates Unstaking of $470M in Ethereum Amidst Asset Rebalancing

Crypto lending platform Celsius, currently navigating bankruptcy proceedings, has confirmed the commencement of recalling and rebalancing crypto assets, specifically Ether ($2,265). This strategic move is aimed at ensuring liquidity and facilitating timely distributions to creditors.

Asset Recall and Rebalancing

Facing Chapter 11 bankruptcy since July 2022, Celsius is actively shifting assets to guarantee ample liquidity for potential distributions. The platform disclosed plans to unstake its existing Ether holdings, which have generated significant staking rewards. The liberated Ethereum will be allocated to offset restructuring costs and expedite distributions to creditors.

Positive News for Customers

Customers awaiting fund withdrawals for over 18 months receive positive news, as Celsius outlines its recovery plan involving the distribution of BTC and/or ETH to creditors. Notably, blockchain analytics firm Nansen indicates that a substantial portion of the pending ETH withdrawals belongs to Celsius.

ETH Withdrawal Statistics

 Nansen reports a considerable 206,300 ETH, equivalent to approximately $468.5 million, in the withdrawal queue linked to Celsius. Of the 19,906 validators seeking a complete exit, Celsius has already withdrawn 40,249 ETH to date. Concerns about a potential market impact due to the release of ETH are countered by optimistic views on Ethereum’s long-term market dynamics.

Market Impact Debate

While concerns exist about a potential market impact or “dump” of Ether, some argue that Celsius’ strategic moves will positively contribute to Ethereum markets over time. There’s anticipation of a positive shift when Celsius concludes its restructuring, distributing remaining assets.

Celsius’ Post-Bankruptcy Strategy

Following bankruptcy amid crypto contagions in 2022, Celsius unveiled a scaled-back strategy, emphasizing Bitcoin mining. However, the sudden change faced criticism from the presiding judge overseeing the bankruptcy proceedings.

Celsius’ decision to unstake Ethereum and rebalance assets marks a pivotal step in its recovery plan, providing hope for long-awaited fund distributions to customers. The ongoing developments also shed light on the challenges and adaptations within the crypto lending sector amid market turbulence.

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