Crypto market wrap: Celsius coin rebounds on court decision
Updated
The Celsius Network’s troubled coin jumped 14% on Wednesday following a favourable court ruling.
CEL continued to ride the proverbial roller coaster after a US bankruptcy court ruled that financially distressed Celsius could sell newly mined bitcoin (BTC). EOS was the only other coin that stood out, rising 12.5 on quiet day for the crypto sector. (All figures based on CoinMarketCap data.)
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CEL to USD
Rise comes after drops
CEL had fallen 16% on Tuesday and 23% on Monday.
The coin has come to know volatility well, experiencing sharp increases and declines since the Celsius Network collapsed, and fellow crypto lender Voyager Digital and hedge fund operator Three Arrows Capital collapsed.
All three companies filed for bankruptcy protection after being hammered by the collapses of the original luna coin and related terraUSD stablecoin.
EOS to USD
Core business tied to lending
Celsius derived most of its business from crypto lending before filing for bankruptcy in July.
According to a Reuters report, Chief US Bankruptcy Court judge Martin Glenn ruled in New York City that Celsius could sell its bitcoin despite concerns that efforts to mine the world’s largest cryptocurrency would not be immediately profitable. The judge decided to respect the company’s business judgment.
But Glenn prohibited Celsius from selling equity or debt investments in other crypto companies.
ACA to USD
Loss expected initially
Ross Kwasteniet, a lawyer representing Celsius, told the court that the initial mining efforts would lose money, but the company is close to generating a profit after investing in computers and a building intended for mining. The US Department of Justice and Texas State Securities Board had opposed the lender’s investment.
But the Texas regulator later withdrew its objection because Celsius only intended to generate cash from the mining efforts rather than using it as future debt collateral. Reuters reported that Celsius had hoped to sell $210m (£174.31) in debt and equity but was rebuffed by the judge.
Bitcoin stays in $23,000 range
Bitcoin stayed in the $23,000 range. Meanwhile, ether, the main coin of the Ethereum blockchain, remained in the $1,800 ballpark.
Ethereum’s foundation poured some cold water on the hype surrounding the network’s upcoming hard fork, known as the Merge. In a blog post, the foundation said the Merge will not significantly lower gas fees, which refer to transaction charges.
And, transaction speeds will not greatly increase.
The Merge is designed to produce ether, and other cryptocurrencies developed on the network through a proof-of-stake (PoS) production system rather than the proof-of-work (PoW) model.
PoW is more expensive and energy-intensive than PoS.
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