Celsius Network, a crypto lending company that went bankrupt, recently announced its plans to stop their Ethereum (ETH) staking. This step was taken to help distribute assets to the company's creditors.
Reasons for Celsius to Stop Staking Ether
Celsius plans to stop ETH staking which previously provided additional income for the company in an effort to reduce costs incurred during the restructuring process.
According to the data, Celsius has staked more than $151 million worth of ETH, which provides an annual return of around 4%-5%.
Although the sale of ETH from staking may not be large, it can contribute to negative perceptions of the cryptocurrency. This occurs alongside other factors such as interest in other blockchains.
The latest data also shows that Celsius has moved more than 30,000 ETH to Fireblocks in the past week, and some of those funds may have been swapped into stablecoins on Coinbase.
In X's account, Celsius stated that this staking termination process, which they called an important event, was scheduled to take place in the next few days.
Celsius filed for bankruptcy protection under Chapter 11 in a US court in July 2022. This decision came after the crypto market experienced a sharp decline, resulting in the company experiencing a liquidity crisis and being forced to freeze withdrawals.
According to the latest court filing, Celsius has opened access for eligible users to withdraw a portion of their crypto, namely around 72.5%, until February 28. It is estimated that approximately 58,300 users have a total of $210 million in assets held in Celsius.
On the other hand, Alex Mashinsky, the founder and former CEO of Celsius who is facing fraud charges and is currently out on bail, is scheduled to face trial on September 17.
Also read: How to Stake Ethereum (ETH) in Four Easy Steps
Impact On Ethereum Price
After the important announcement from Celsius about stopping Ether (ETH) staking, the crypto market showed mixed reactions. This move, which is part of the company's restructuring process amid bankruptcy, has sparked conversations about its potential impact on the price of Ethereum going forward.
Market analysts predict that this staking halt will likely reduce selling pressure on ETH, potentially driving the price up in the short term. Given Ethereum's position as the second largest cryptocurrency and the continued growth of the DeFi and NFT ecosystem, many are optimistic that Ethereum will see a positive trend in the coming months.
Of course, this remains dependent on global market dynamics and other external factors that influence the crypto sector as a whole.
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DISCLAIMER : This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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