On January 5, Celsius confirmed its decision to unstake its current Ether holdings, totaling 206,300 Ether, from the staking withdrawal queue. These holdings, which have been a source of valuable staking rewards income, will be leveraged to offset specific costs incurred during the restructuring process. The liberated Ether is intended to facilitate timely distributions to creditors, marking a positive development for users patiently waiting for over 18 months to retrieve their funds.
In preparation of any asset distributions, Celsius has started the process of recalling and rebalancing assets to ensure ample liquidity
— Celsius (@CelsiusNetwork) January 4, 2024
Positive Impact on Ether Markets
Blockchain analytics firm Nansen revealed that a significant portion, approximately 30%, of the Ether in the pending withdrawal queue belongs to Celsius. This comprises an impressive 206,300 ETH, valued at around $468.5 million at current market prices. Despite concerns about a potential market impact from the move, some observers view this as a positive step for Ether markets in the long run.
ETH waiting for withdrawal. Source: Nansen.ai
While acknowledging worries of a potential Ether “dump,” some community members express optimism about the relief it could bring to the Ethereum network. One user noted, “I don’t think you guys understand how much weight will be lifted off ETH when Celsius vampires finally move on and redistribute what’s left.”
Celsius: Road to Recovery
Celsius was among several crypto lenders facing financial challenges during the crypto contagions of 2022. In November 2023, the firm unveiled a scaled-back post-bankruptcy strategy, emphasizing a pivot towards Bitcoin mining. However, the judge overseeing the bankruptcy proceedings expressed dissatisfaction with the abrupt change in direction.
As Celsius takes these crucial steps to rebalance its assets and unlock liquidity, it signifies a pivotal moment in the company’s recovery journey. The allocation of unstacked Ether towards creditor repayments is anticipated to bring relief to the affected users who have patiently awaited their funds’ return.