Selling pressure on ETH, Celsius releases Ethereum staking, waiting for withdrawals worth 67 billion yen

10 months ago 96

Approximately 67 billion yen of ETH is waiting for withdrawal

Crypto asset (virtual currency) lending company Celsius Network announced on the 4th that it will suspend staking of its Ethereum (ETH) holdings.

Celsius, which has filed for bankruptcy and is currently undergoing restructuring procedures, has been selling staking rewards on the open market to cover costs associated with the restructuring process. This time, the plan is to distribute the Ethereum that had been staked to creditors.

Celsius said:

Celsius will unstake existing ETH holdings, which have provided valuable staking rewards income to the estate, to offset certain costs beginning throughout the restructuring process

— Celsius (@CelsiusNetwork) January 4, 2024

We will be de-staking on a large scale in the coming days, ensuring that Ethereum can be distributed to creditors in a timely manner.

Additionally, eligible creditors will receive physical Bitcoin (BTC) and Ethereum as outlined in the previously approved plan.

According to data from blockchain analysis company Nansen, Celsius is waiting for a withdrawal of 206,300 ETH (equivalent to approximately 67.5 billion yen). This amount represents 32% of the Ethereum waiting to be withdrawn.

Source: Nansen

Additionally, Celsius has transferred over 30,000 ETH to custodian Fireblocks in the past week. In addition, some of the money was deposited on the cryptocurrency exchange Coinbase.

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What will be the impact on Ethereum price?

Regarding the cancellation of Ethereum staking by Celsius, the impact on the Ethereum price is currently being discussed among virtual currency users.

While some are concerned that this will lead to selling pressure, others point out that the market may be well-received by the fact that Celsius will no longer regularly sell staking rewards. It is also necessary to consider that the purpose of unlocking is not a direct sale by Celsius, but distribution to creditors.

Celsius is currently staking approximately 21.8 billion yen ($151 million) worth of Ethereum. Currently, it is expected that it will be possible to obtain an annual yield of 4% to 5% or more. The specific amount of Ethereum that Celsius will unlock in the future has not been announced.

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Focus on mining business

Celsius went bankrupt in 2022 due to a series of debt defaults that occurred in the virtual currency market. The company has since filed for Chapter 11 bankruptcy and is proceeding with corporate restructuring.

The company has also indicated that it will focus on Bitcoin mining in the future, and is collaborating with listed cryptocurrency mining company Hut8 to develop a mining facility in Texas, USA.

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What is Chapter 11 of the US Federal Bankruptcy Code?

A restructuring-type bankruptcy law system similar to Japan’s civil rehabilitation law. The company will rebuild the company by reducing debt while continuing to operate the company. After filing the application, debt collection will be suspended, and the debtor will work to sort out their debts and, in principle, formulate a restructuring plan within 120 days.

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