The recent global digital asset market recovery has seen its fair share of turbulence, especially with the news about crypto lender Celsius Network’s decision to sell all of their customers’ altcoins under a new reorganization plan. The move has stirred mixed reactions in the crypto space, especially when considering the potential market disruptions it could cause.
According to the announcement, Celsius Network expects to commence selling all altcoins excluding custody and withhold account holdings from July 1, 2023. The amount they recover will then be converted into Bitcoin (BTC) and Ethereum (ETH). With the company reportedly holding around $215 million worth of altcoins, a massive dump is anticipated.
The crypto community wonders whether such a drastic move might result in a rug pull situation, often associated with fraudulent schemes. Celsius Network’s largest altcoin holding is in their native token, Celsius tokens (CEL), estimated at $70.5 million. CEL currently trades at an average price of $0.1054. Critics argue that mass-selling CEL and other altcoins may have a detrimental impact on their market value.
Furthermore, the second-largest altcoin held by Celsius is Polygon (MATIC), amounting to $51.8 million. The recent decline in the token’s value by over 25% in the past week has already cast a negative light on its performance. MATIC is now trading at an average price of $0.57, with a market cap close to $5.3 billion.
Cardano’s (ADA) inclusion in the list of assets that may be under selling pressure is another reason for concern. Celsius owns approximately $26.2 million worth of ADA tokens. The coin has recently experienced a price drop of 17% within 24 hours, partly due to the US SEC lawsuit labeling it as a security. ADA is trading at an average price of $0.25, with a market cap exceeding $9 billion.
On the other hand, proponents of the Celsius Network’s decision point out that the company’s reorganization plan aims to consolidate resources and reinvest them into more established cryptocurrencies such as Bitcoin and Ethereum. They argue the move could provide a more stable investment environment for their customers.
In conclusion, the potential market implications of Celsius Network’s decision to sell off a considerable amount of altcoins are still unclear. While the crypto community remains divided over whether this move is a prudent step toward long-term stability and growth or a plot towards potential fraudulent activities, one thing is apparent – the digital currency landscape remains an evolving and unpredictable terrain. As always, market participants must exercise due diligence and conduct thorough research before taking any investment decisions.
Source: Coingape
