Premarket trading Monday had the three top U.S. equity indexes picking up where they left off on Friday afternoon. All three traded lower, but only by about half as much as their closing prices Friday.
The cryptocurrency markets are a different story. Bitcoin (BTC) was trading down almost 14% at around $23,600, ethereum was down 18.2% at just under $1,200, and Binance Coin (BNB) was down about 14.6% at $220. These prices reflect declines over the past 24 hours. Recall that crypto markets never sleep.
Of the 10 largest (by market cap) cryptocurrencies, only Binance USD and USD Coin, both stablecoins, were trading higher. By less than 0.1% in both cases.
Last Friday’s consumer price index report sank crypto prices just as it sank equities prices. Then, late Sunday, crypto lending service Celsius announced on its blog that it is temporarily halting all withdrawals, swaps, and transfers between accounts due to “extreme market conditions.” The company took this step in order “to put Celsius in a better position to honor, over time, its withdrawal obligations.”
Celsius operates like a consumer bank, taking deposits from some customers, lending to others and profiting from the difference in the interest rate it pays the former and that it collects from the latter. The big difference is that it does not have federal deposit insurance, and any crypto assets it claims are subject to crypto price movements.
Colin Wu (@WuBlockchain) has been watching Celsius’s movements:
An address suspected to be Celsius (0x87A67e7dC32fdc79853D780c6f516312b4A503B5) borrowed 278 million DAI in the Maker protocal by staking 17,919.37 WBTC, making it the largest personal debt position in the protocol. If BTC falls to $22,584, the position will face liquidation https://t.co/grty3xKwTM
— Wu Blockchain (@WuBlockchain) June 13, 2022
24/7 Wall St.Wrapped Bitcoin (WBTC) trades at around $23,600, slightly lower than Bitcoin itself.
Update: Celsius has transferred about 104,000 ETH to FTX in the past three days, including about 50,000 ETH today, 12,000 ETH yesterday, and 42,000 ETH the day before yesterday. In addition, Celsius also transferred about 9,500 WBTC to FTX today.https://t.co/RaiJTJIVm9 https://t.co/1RQaa9fT3u
— Wu Blockchain (@WuBlockchain) June 13, 2022
A Celsius rival, Switzerland-based Nexo, is riding to the rescue, at least of Celsius’s investors:
After what appears to be the insolvency of @CelsiusNetwork and mindful of the repercussions for their retail investors & the crypto community, Nexo has extended a formal offer to acquire qualifying assets of @CelsiusNetwork after their withdrawal freeze. https://t.co/JFtKTHRLcY
— Nexo (@Nexo) June 13, 2022
Nexo has offered to acquire some Celsius assets, “mainly collateralized loan receivables secured by corresponding collateral assets, brand assets and customer database.” The offer is good for one week, with the sale price still to be negotiated.
The Celsius platform’s token, known as CEL, dropped by 70%, from $0.49 to $0.15, in the first hour following the company’s announced pause in withdrawals. According to CoinMarketCap, CEL traded at around $0.217 early Monday morning.
Here is CEL’s chart for the past 24 hours.
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