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Crypto market wrap: Celsius coin rebounds on court decision

By Monte Stewart


Updated

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In this article:
BTC/USD
Bitcoin / USD
16852.30 USD
-178.9 -1.050%
CEL/USD
CEL/USD
1.8300 USD
0.0006 +0.060%
EOS/USD
EOS / USD
1.0125 USD
0.0431 +4.510%
ACA/USD
ACA/USD
0.1310 USD
-0.0018 -1.360%

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Image of coin and graph
The Celsius coin rebounded after a US Bankruptcy Court judge allowed the company to sell bitcoin. - Photo: Shutterstock

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.

ETH/USD

1,236.15 Price
-1.810% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 22:00 (UTC)
Spread 5.00

BTC/USD

16,852.30 Price
-1.050% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 22:00 (UTC)
Spread 60.00

LUNC/USD

0.00 Price
-3.070% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee -0.0500%
Overnight fee time 22:00 (UTC)
Spread 0.00000687

XRP/USD

0.38 Price
-1.870% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 22:00 (UTC)
Spread 0.00327

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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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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