On Jan. 5, Crypto lending platform Celsius, which has been in bankruptcy court since its Chapter 11 filing in July 2022, announced a significant move to unstake over 30,000 ETH, potentially alleviating selling pressure on Ether (ETH) prices.
Celsius Embraces Bitcoin Mining
According to a recent tweet post, Celsius had integrated staking into its operations and was using rewards to cover expenses related to the reorganization process. This strategic decision comes as Celsius shifts its focus to bitcoin mining during the ongoing restructuring, aiming to address concerns that have contributed to ETH’s recent underperformance.
However, in a strategic move, the company has now decided to unstake existing ETH holdings, a crucial step in its effort to offset specific costs incurred during the restructuring.
The move is positive news for customers waiting at least 18 months to get their funds back. Under the recovery plan, According to Celsius’ recovery plan, customers will receive either Bitcoin (BTC) or ETH as part of the distribution.
Unstaked ETH to Address Costs
Blockchain analytics firm Nansen reveals a significant portion of the ETH in the pending withdrawal queue is linked to Celsius, amounting to approximately 206,300 ETH.
At current market prices, this translates to a substantial value of around $468.5 million. The data further indicates that 19,906 validators are eagerly awaiting a full exit, with Celsius having already withdrawn 40,249 ETH to date.
According to Arkham, wallets linked to Celsius have staked a substantial sum, surpassing $151 million in Ether, with an annualized yield of 4%-5%. Although the staking rewards may not trigger substantial ether sales, they might have played a role in fostering negative sentiment towards the token, exacerbated by factors such as growing interest in alternative blockchains.
Recent outflow data reveals Celsius moved over 30,000 ETH to custodian Fireblocks, with a portion deposited on Coinbase. This action implies a potential swap for stablecoins, adding another layer to the evolving dynamics of the market.