Crypto market wrap; Celsius coin keeps falling, Acala burns
Updated
The Celsius coin kept falling Tuesday and the Acala network burned its extra tokens as the cryptocurrency market continued to roll with the punches.
CEL was down 16% around the time that conventional markets closed in North America. (All figures based on CoinMarketCap data.) The decline followed a 23% plunge on Monday. But, on the whole, prices showed resilience in the face of the the crypto winter.
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CEL to USD
Coin knows volatility
CEL 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.
But CEL’s decline Tuesday was an outlier in comparison to the rest of the market, which was up marginally.
CHZ to USD
Investors still hungry for Chiliz
Dogecoin (DOGE), a popular meme token, was the top gainer as it rose a relatively modest 10%.
Chiliz (CHZ) continued to appeal to investors, rising 8% after gaining 13% on Monday. But no other gainers stood out, while losses were minimal.
ACA to USD
Burn confirmed
The Acala Network confirmed on Twitter that it burned approximately 1.3 billion ACA after receiving approval from its community.
Acala (ACA) was down slightly in the aftermath of a weekend hack. ACA’s value disintegrated as the stablecoin lost its peg. Hackers capitalized on a faulty liquidity pool and minted an extra 1.3 billion tokens, which the Acala Network, the coin’s backer, managed to keep within the Polkadot (DOT) blockchain. (The network operates on Polkadot.)
Analyst doubts Acala can recover
A leading analyst doubts that ACA will recover its lost value.
“Once again it goes to show that the algorithmic stablecoin, in this case Acala, which is a stablecoin that’s collateralized against other currencies and not pegged to the US dollar, is vulnerable to an attack with smart contracts,” said Chris Terry, vice-president of enterprise solutions at US-based open lender SmartFi.
“Once a stablecoin is depegged like this, the chances of it coming back are very slim.”
He said tether (USDT) and USDC, both pegged on a one-to-one basis with the US dollar, are the safest stablecoins in which to invest.
“Algorithmic stablecoins and multi-collateralized stablecoins pegged against other cryptocurrency assets, continue to have a much higher risk than most people understand,” said Terry. “When it comes to stablecoins, there is no reason to really use anything other than tether and USDC.”
Hodlnaut seeks protection from creditors
Troubled Singapore-based crypto lender Hodlnaut announced Tuesday that it has filed for protection from creditors. The company applied to the Singapore High Court to be placed under judicial management.
Hodlnaut said the application is the best solution under the circumstances as it tries to avoid having to liquidate its customers’ crypto assets. The debt-laden lender froze transfers and swaps earlier this week due to what it described as difficult market conditions.
Bitcoin and ether lose ground
Market leaders bitcoin (BTC) and ether (ETH), the main coin of the Ethereum blockchain, lost ground after posting recent gains.
Bitcoin fell slightly below $24,000 and ether dropped under $1,900 after surpassing $2,000 on the weekend.
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