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Crypto lending platform Celsius continues to defend itself from liquidation and looming insolvency. The firm has paid down another $140 Million on its Bitcoin-backed loan with MakerDAO since the start of the month.
Celsius Stays Afloat
As data from Defi Explore demonstrates, Celsius has made four payments covering its outstanding debt since July 1st. The company’s initial payment on Friday came in the form of 22.6 million DAI – an algorithmic dollar-pegged stablecoin.
The platform submitted another, smaller payment of 6.2 million DAI on Sunday. The bulk of the funds were transferred on Monday, through 50 million and 64 million DAI transfers respectively.
The payments have brought Celsius’ liquidation point on its collateralized Wrapped Bitcoin (WBTC) down to just $4,966. Bitcoin’s price hasn’t fallen that low since Bitcoin’s “Black Thursday” in 2020, when the asset tanked amid pandemic uncertainty.
Were prices to fall so low, the underlying collateral (23,962 WBTC) would amount to a $119 million selloff. This would likely contribute to further declines for Bitcoin, as did Terra’s near 40,000 BTC selloff in May.
Celsius still owes another $82 million to Maker, but has left itself in a significantly stronger position since the start of the month. Its collateral to loan ratio was just 220% before this month and has now risen to 577%.
Celsius was one of the first large lending platforms to publicly confess to liquidity issues in June. The funds belonging to Celsius users have been frozen for weeks as the team struggles to pay down similar outstanding debt.
So far, it’s been fairly successful, but no updates have been provided on when customer withdrawals may resume. Nevertheless, Celsius users were still reportedly earning yield rewards on their accounts as of last week.
Other firms haven’t been so lucky, however. Three Arrows Capital has officially filed for bankruptcy after it ghosted various counterparties and saw various loans liquidated. Contagion from its fallout has spread to other lending platforms and exchanges that held the VC firm’s debt.
Vauld, a Singapore-based crypto lending platform, was one of the latest to pause its withdrawals due to financial difficulties. Over $197 million worth of assets were withdrawn from the platform from June 12th until the month’s end.
Even the major crypto community figure Roger Ver is apparently facing margin calls from CoinFLEX, another struggling exchange.