Supporters of cryptocurrencies have long advocated that cryptocurrencies can be used to hedge against various "uncertainties", but they have not been able to survive the global slump in risky assets.Celsius Networks LLC, one of the world's largest cryptocurrency lending platforms, said on Sunday local time that "due to extreme market conditions," the platform will suspend all withdrawals, transactions, and transfers between accounts
Supporters of cryptocurrencies have long advocated that cryptocurrencies can be used to hedge against various "uncertainties", but they have not been able to survive the global slump in risky assets.
Celsius Networks LLC, one of the world's largest cryptocurrency lending platforms, said on Sunday local time that "due to extreme market conditions," the platform will suspend all withdrawals, transactions, and transfers between accounts. As soon as the news came out, the platform's token CEL fell in response. According to CoinMarketCap data, its price dropped by 70% from an early high of $0.49 to $0.15 within an hour.
At the same time, other cryptocurrencies have had a difficult time, with the New York Times calling them 'free fall'. On June 14th, Beijing time, the price of Bitcoin (BTC), the world's highest cryptocurrency by market value, fell below $21000 at one point, reaching a new low of $20813 since December 2020, with a daily decline of over 17.28%. Ethereum (ETH), on the other hand, fell below the $1100 level, reaching a new low of $1097.67 since January 2021, with its largest intraday decline exceeding 17.77%. In the afternoon, the prices of Bitcoin and Ethereum slightly rebounded, with Bitcoin currently trading at $22691 and Ethereum trading at $1220.
Founded in the United States in 2017, Celsius is a decentralized financial (DeFi) platform and one of the largest cryptocurrency lending platforms. It attracts users to deposit encrypted assets with fixed income and invest them, attracting over $25 billion since its launch in 2018. The platform provides customers with interest rates higher than the market average.
As a platform with financial attributes, Celsius has neither regulation nor transparency. It only released financial reports in 2019 and 2020, and has not released them since then. This statement of Celsius has triggered market concerns about its solvency.
According to CNBC, the asset value on the platform has decreased by half, from $24 billion in December 2021 to $12 billion in May this year. According to the Financial Times, between March and May, $1 billion was lost from the platform.
In its explanation to the client, Celsius added that the platform's business is still in continuous operation, and the ultimate goal of the platform is to stabilize liquidity and resume withdrawals, transactions, and transfers between accounts as soon as possible. But no specific date was given, and it was also stated that there is still a lot of work to be done when restoring various options of services, which will take time and may be delayed.
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