According to a recent report from blockchain analytical firm Kaiko, Celsius, a cryptocurrency lender facing bankruptcy, intends to convert its altcoin to Bitcoin (BTC) and Ethereum (ETH). This move could potentially add further strain on the cryptocurrency market.Â
The report highlights that the majority of altcoins held by Celsius have experienced substantial declines in their liquidity over the course of the past year. These drops have ranged from 6% to an alarming 84%.
According to the report, “the aggregated market depth for Celsius’ altcoin holdings has declined by 40% since 2022, totalling around $90mn in early July.”
Based on the provided data, the liquidity situation of Litecoin (LTC), Bitcoin Cash (BCH), polygon (MATIC), and Aave (AAVE) have experienced notable changes over the past year. On the other hand, other cryptocurrencies have primarily declined.
Remarkably, Bitcoin Cash (BCH) and Litecoin (LTC) experienced a substantial surge in liquidity following the introduction of support by EDX, a crypto exchange that enjoys backing from traditional financial institutions.
According to a blockchain analytical firm, Celsius, a cryptocurrency platform, has amassed over $90 million in altcoin holdings. As a result, the firm predicts that liquidating these holdings without experiencing substantial price slippage will prove to be challenging for Celsius.
Kaiko added that “more than 60% of altcoin market depth is concentrated on Binance and other off-shore exchanges while 30% is on U.S. exchanges.”
As per Kaiko’s finding, Celsius encounters a significant challenge with regard to its largest altcoin holding, which is its native token called CEL. This particular altcoin constitutes approximately 65% of Celsius’s overall altcoin holdings.
CEL is facing a scarcity of liquidity, with market depth plummeting to a mere $30,000. This limited liquidity is primarily concentrated on OKX and Bybit exchanges.
Also Read: CFTC Claims Ex-Celsius CEO Mashinsky Defied U.S Regulations
