Celsius drives down liquidation price with $120 million loan repayments

Celsius has been at the center of most cryptocurrency controversies over the last month. The lending platform had to suspend withdrawals, transfers and swaps on the platform, citing extreme market conditions, but that was just the beginning of its troubles. However, Celsius seems to be taking it, as contrary to what others have done, the platform has taken steps to pay down its debt and has now reduced its liquidation price by over 200%.

Celsius pays $120 million in loan

Earlier this week, there was good news for the Celsius lending platform, which was able to put more money into its loans. Previously, the company added 7,000 BTC, bringing its liquidation price down to $16,582, but is still at risk given Bitcoin’s volatility. This is why the company continues to add positions to drive down the liquidation price to save the platform.

Related reading | Bitcoin support hits $19,000 as markets head into new week

Over the weekend, Celsius reportedly closed again, with the lending platform making a cumulative $142.8 million in a series of repayments since July 1. The latest of these payments stands out, with the platform paying $64 million in DAI stablecoins for its loans. The payment came hours after another large repayment of $50 million in the DAI stablecoin.

For now, Celsius has managed to bring its liquidation price down to $4,967, which is a more comfortable point for the lending protocol and its users who still want to get back tokens that are now stuck on the platform. Currently, Celsius has an outstanding loan of $82 million with an overcollateralization ratio of over 577%.

CEL token trading at $0.89 | Source: CELUSD on TradingView.com

Will users get their coins back?

Celsius has yet to say to users whether they will get back their funds stranded on the platform. A large portion of the market believed the tokens were lost, but as Celsius repaid the loan multiple times, it continued to fuel hope in the hearts of investors that they would one day be able to withdraw their assets again.

Related reading | Active Ethereum Addresses Hit 2020 Levels, Will Price Follow?

Users report that lending protocols continue to pay out rewards for their holdings despite the inability to withdraw. Its native token, CEL, saw a surge after announcing that withdrawals were blocked and suffered horrific losses.

Its last communiqué with the public was through middle position The platform announced that it will continue its efforts to stabilize liquidity and resume operations. The blog post did not include information on when the withdrawal option will resume. However, it did say it will continue to “take important steps to protect and protect assets and explore the options available to us.”

Featured image from Reuters, chart from TradingView.com

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