Sunday, May 26, 2024

Celsius caught in Terra-like dwindling tornado.

After being struck hard in May’s crypto market crash, it seems Celsius is caught fast in a Terra-like dwindling tornado. Following a huge sell-off by whales, the firm continues to decline in June. Celsius operates like a bank, lending out clients’ funds but there are no strict insurance requirements on traditional lenders.

The spotlight fell on Celsius, one of the world’s leading crypto lending platforms, after its native token CEL dived to new high lows last month. CEL recorded a 59% drop from the opening day of May’s market value. Celsius’ slump has also hit the broader crypto market. As such, there has been a steep decline in the overall market capitalization. The crypto market has been caught in a whirlpool of geopolitical events and rising inflation.

To circumvent the crash, Celsius paused all account withdrawals. But this triggered fears that the platform may shut down for good. Monsur Hussain, a senior director of financial institutions at Fitch Ratings, says the liquidation of Celsius’ assets will further rock the valuation of crypto assets. He believes this will lead to a wider round of contagion within the crypto sphere.

Celsius is one of the major players in the decentralized finance (DeFi) space. It owns numerous popular assets in the DeFi world and has also staked Ether which promises users rewards on their deposits. Omid Malekan, an adjunct professor at Colombia Business School, believes any spillover effects from the Celsius debacle are likely to be limited to crypto. He said the biggest risk of contagion is within crypto markets themselves.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
RELATED ARTICLES

Most Popular