Why has the CEL (Celsius) token increased by 1600% in 1 week?

The Celsius platform has been threatened with bankruptcy for several days. As a result, the price of its CEL token fell by more than 70%. However, we have seen an unexpected bounce that printed an impressive 1600% over the past week. One of the company’s shareholders proposed a turnaround plan and Celsius paid $10 million to decentralized finance (DeFi) platform Compound (COMP).

A new high at $1.59

It’s hard to miss this news. For weeks, several experts have been denouncing Celsius, which could end up bankrupt for its users. The problem lies in its strategy of mismanagement of client assets and excessive risk.

A few days after the start of the turmoil, Celsius announced the suspension of cryptocurrency withdrawals, transfers and exchanges on its platform. As a result, the CEL token plunged more than 75% after the announcement, falling from $0.365 to below $0.09.

However, for no apparent reason, the token has experienced rapid and unusual growth. In fact, CEL hit a new local high around $1.59 on June 21. In other words, a rally of more than 1600% in one week and since the announcement.

Good Celsius-related news appears to have caused the price of CEL, the token issued by Celsius to reward users of its platform, to skyrocket.

According to a recovery plan proposed by Simon Dixon, founder of a cryptocurrency investment firm Bnk to the Future, “financial innovation” is the only way to find a “timely solution” to the situation in which Celsius is currently located.

Last week, Celsius halted withdrawals for all clients, citing “extreme market conditions”. In the plan, Dixon describes himself as a “shareholder of Celsius”.

According to Dixon, one of the reasons why “financial innovation” is preferable to using traditional tools is that the situation around Mt Gox – the notorious bitcoin (BTC) exchange that collapsed in 2014 – remains unresolved today.

Several refunds have been made

Block explorer Etherscan noted that the company repaid 10 million DAI while collecting 166 COMP ($5,200). Celsius has made numerous other refunds over the past week. In a series of transactions, the platform contributed 53.6 million DAI to its vault using another yielding DeFi platform, Oasis Protocol.

Celsius uses various DeFi protocols to generate interest among its customers. His latest payment of $10 million likely means he will close positions on these services to regain liquidity and again allow withdrawals for his clients.

While this may be a step toward solvency, the $10 million paid today is only a fraction of Celsius’ business.

For example, the week of May 6 saw an inflow of $397 million and an outflow of $1 billion. Therefore, businesses may not be able to withdraw funds if demand remains too high.

Celsius also said it would work with regulators and authorities. Last week, regulators in four US states launched an investigation into the situation.

“Our industry has come back stronger from each disaster and now is the time for us to offer support from the bottom up, within the regulations we have always followed.”

According to Dixon, thanks to this innovation, Bitfinex’s situation “was resolved in nine months, and it worked well for depositors,” he said.

In 2016, crypto exchange Bitfinex issued LEO tokens to users affected by a hack that drained the platform of $70 million in bitcoins

We would like to thank the writer of this article for this incredible material

Why has the CEL (Celsius) token increased by 1600% in 1 week?


You can find our social media profiles here as well as other pages on related topics here.https://metfabtech.com/related-pages/