Bankrupt lender Celsius’s plan to liquidate its altcoins for Bitcoin (
$110,171.00 ) (BTC) and Ethereum (
$0.00 ) (ETH) could exert more pressure on the crypto market, according to a July 10 report from blockchain analytical firm Kaiko.
Kaiko noted that most altcoins held by Celsius had recorded significant drops, ranging from 6% to as high as 84%, in their liquidity over the past year.
“The aggregated market depth for Celsius’ altcoin holdings has declined by 40% since 2022, totalling around $90mn in early July.”
Per the chart below, only Litecoin (
$55.98 ) (LTC), Bitcoin ( $110,171.00 ) Cash (BCH), Polygon (MATIC), and Aave (AAVE) saw pronounced changes in their liquidity situations over the past year, while others mostly declined.
Source: Kaiko
BCH and LTC, in particular, saw a surge in their liquidity situation after EDX, a crypto exchange backed by traditional financial institutions, enabled support in June.
The crypto company further noted that Celsius’s total altcoin holding exceeded $90 million, “which means it will be difficult for the company to liquidate without incurring high price slippage.” It added:
“More than 60% of altcoin market depth is concentrated on Binance and other off-shore exchanges while 30% is on U.S. exchanges.”
CEL token liquidity is almost non-existent
According to Kaiko, Celsius faces a problem as there is almost no liquidity for its most significant altcoin holding, CEL.
CEL is Celsius’s native token, accounting for nearly 65% of the bankrupt firm’s total altcoin holdings.
“There is virtually no liquidity for CEL as measured by market depth, which has collapsed to just $30k, concentrated mostly on OKX and Bybit.”
Source: Kaiko
Since Celsius filed for bankruptcy, the lender’s native token has seen waned interest, with its value dropping to under $1 after peaking at over $8 in 2021, according to CryptoSlate’s data.
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