What future does Celsius Network hold after its suspension?

Highlights

• Crypto lending and swapping service provider Celsius Network has stopped withdrawals
• Bitcoin and Ethereum seem to have suffered another blow due to this, having lost immensely of late
• Celsius claims this is due to prevailing “market conditions” with its operations intact

The cryptoverse’s troubles seem far from over. Over the past one week, the largest asset Bitcoin (BTC) has lost nearly 30% while Ethereum’s losses are even sharper. Ethereum’s ETH ranks second to BTC, and as of writing, their year-to-date (YTD) losses amounted to nearly 70% and 55%, respectively.

What seems to be dealing a severe blow to the two crypto assets right now is Celsius Network. It is a platform where crypto enthusiasts can engage in lending, borrowing and swapping of assets. What is happening with Celsius and how bad it is for individuals and the wider cryptoverse? Let’s find out.

What led to the current situation of Celsius?

In a “memo” issued to its users, Celsius Network said it had “paused” withdrawals. Swapping tokens and the transfer of assets between accounts are also suspended. Celsius is one of the leading ‘yield-farming’ protocols which is gaining traction due to promises of a high annual percentage yield (APY).

Celsius claims up to 17% APY for its users, promoting HODL sentiment. HODL in cryptos simply means hold on for dear life. On its official website, Celsius claims to have over 150,000 BTC in assets. More than 83,000 ETH and 5,100 BTC are said to have been paid by Celsius to its users.

Binance, a major crypto exchange, is also said to have suspended BTC withdrawals. However, Binance has so far maintained that it was a “temporary pause” caused by a “stuck transaction”.

Also read: Only 2 major cryptos have gained this year. Which are they?

Why has Celsius stopped withdrawals?

The memo issued by Celsius Network cites “extreme market conditions” and “interest of community” as the forces behind the move. The network has also reassured its users that its “operations continue” with users’ assets held by Celsius earning rewards even during this phase.

Celsius crypto news

Aside from the withdrawal of assets, one more aspect is worth noting. In a tweet, the network said that it had nothing to do with any Celsius 2.0 token.

A new Celsius token is said to have been floated, but not by Celsius Network. Celsius’ CEL token is its native token and a tradable asset. As of writing, the Celsius crypto is trading under US$0.3. The CEL crypto has lost over 20% in the past 24 hours.

Data provided by CoinMarketCap.com

Also read: Which are top three NFTs by sales volume?

Bottom line

Celsius Network has suspended its primary services including withdrawals and swapping. The platform, however, maintains that its operations continue. During the suspension phase, assets of users will accrue rewards, it says. Celsius’ troubles seem to be dealing a severe blow to major assets including BTC and ETH. Besides, this also comes as a reminder of risks for enthusiasts that chase high APY by just holding assets.

Also read: Speculations swirl around Depp’s NFTs featuring his daughter Lily Rose

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