In an interesting development, the founder of Bank of the Future (BF), Simon Dixon, indicated that if the prices of Bitcoin and Ether doubled, crypto lender Celsius could potentially repay all USD claims. He did, however, urge the creditors to exit the ongoing bankruptcy proceedings before BTC and ETH prices reached the projected figure. The reason? To avoid another ‘rug pull,’ a term used to describe when investors quickly withdraw their investment causing a sharp market drop.
Celsius is currently sitting in a deep trench due to a substantial number of legal claims. According to recent estimates by the BF, Celsius could wipe the slate clean and repay all USD claims if the price of Bitcoin skyrockets to $54,879, and Ether manages to hit the $3,750 mark. This is, needless to say, contingent on a massive rise in the current price levels. As of now, the company is banking heavily on the possibility of this price bounce, following its recent request in court to convert all its altcoins into Bitcoin and Ether to maximize asset value.
While Dixon’s estimated price points represent a glimmer of hope for Celsius, it is crucial to remember that these are not certainties, but mere projections. The investments in mining, institutional loans, and assets worth approximately $1.4 billion within their new restructuring plan under Fahrenheit appear to be a tangible method to recover losses. According to estimates by the BF, recovery under both the Fahrenheit Plan and BRIC’s wind-down plans are around 65%, which could be pushed to 75% considering that 10% of claims could potentially be unclaimed.
It is, however, important to point out that these estimates come from an external investment banking team at BF with “no access to privileged information.” There’s an inherent risk level in this scenario, reminding us that betting on a future market condition, especially a doubling of the price of two of the most highly traded cryptocurrencies, is by no means a solid plan.
Still, the very possibility has sparked discussions around the strength and stability of digital currencies. Even amidst a much-contested bankruptcy, Celsius pins its hopes on the market performance of Bitcoin and Ether. Whether this is a testament to the robustness of the blockchain technology these currencies use, or merely an all-or-nothing hail Mary, only time will tell. For now, crypto enthusiasts and sceptics alike watch as an important chapter in cryptocurrency’s brief but eventful history unfolds.
Source: Cointelegraph
