The crypto community has been worrying about a potential $528 million bitcoin dump after 25,000 wrapped Bitcoin (WBTC) worth of funds were moved from the Celsius lending platform to another Cryptocurrency exchange called FTX.
The major transfer to the exchange comes after Celcius paid off its remaining $41.2 million loan to Maker (MKR) Protocol, the lending platform is now able to free up all of WBTC collateral that was on hold.
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Good News for Celsius Depositors
With the community still trying to figure out what they should do with this transfer, some fear a dump of WBTC on exchanges could push down prices even further.
There are many who believe that this may be in preparation for Celsius to swap their wrapped bitcoin for BTC, which could mean good news for depositors waiting on the platform.
The 21,962 WBTC unlocked from paying off the remaining DAI loan has already found its way to FTX…
that didn’t take long…
Incoming $BTC dump? https://t.co/A9B9YaLQ1W#CelShortSqueeze = #CelPumpAndDump
Not your keys, not your crypto pic.twitter.com/V2edblhmXZ
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— Airdawg (@Colwellinvestor) July 7, 2022
The 25,000 wBTC sent to FTX follows news earlier today that 150,000 BTC could potentially be issued to the market as Mt.Gox creditors get their BTC back after an eight-year wait.
So far, neither Celsius nor CEO Alex Mashinsky have revealed any information about the fund’s movement.
Joni Pirovic, a crypto lawyer who also specializes in blockchain and digital assets, told reporters that Celsius’s repayment of its loan position with Maker will ultimately help their clients.
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“The Maker Protocol relies on overcollateralized loan positions, so DAI’s $41 million worth of loan repayment issued 21,962 WBTC of capital that is now available to satisfy customer withdrawal requests.”
Pirovic said that even if Celsius files for bankruptcy, paying off the debt and taking back collateral could improve their situation with clients.
“The question is, what will Celsius do with the bail withdrawn? Reserve it for customers or risk it for trading and lending.”
What is Celsius?
Celsius is a cryptocurrency that allows users to borrow and lend funds, as well as earn interest on deposited coins. It operates on blockchain technology and utilizes the CEL token. The project’s goal is to create a global community of borrowers and lenders, while also providing easy access to credit for those who need it.
Celsius Network plans to achieve this by utilizing its own decentralized platform where users can borrow and lend cryptocurrencies without having to go through a middleman. Interest rates are set by the market, and users can earn up to 8% annual interest on their deposited coins.
Additionally, Celsius Network has a rewards program that allows users to earn free tokens for participating in its community.
