Despite a positive week, clouds are gradually gathering over the cryptocurrency market
The bankruptcy of The Celsius Network may affect not only its customers, who will have a unique opportunity to never see their money again, this event will also affect the entire industry. The cryptocurrency lending giant owns more than 80,000 mining rigs and may now be forced to sell some of these assets in order to pay off creditors. As a result, prices on the market of used crypto machines will drop even more.
The collapse of TerraUSD in May led to the fact that the decentralized financing platform (DeFi) Celsius froze withdrawals, swaps and transfers between customer accounts due to "extreme market conditions." Last week, the company filed for bankruptcy, which is why its users are worried about when and whether they will get their money back. Bloomberg reports that the mining subsidiary of Celsius has also applied for protection. According to a statement from Celsius Mining, it owns 80,850 Asic miners, 43,600 of which are in operation, and by the end of 2022 it plans to launch about 120,000 new machines and mine more than 10,000 coins. Celsius Mining is expected to start selling off old ASIC equipment. The problem, however, is that the prices of these machines have dropped by 50% to a two-year low as the crypto winter continues.
CoinDesk writes that Celsius Mining has already auctioned off at least 7,000 newly acquired mining rigs in June at a below-market price. It is expected that with the liquidation of more equipment companies, this trend will continue.
Celsius emphasizes that filing for Chapter 11 bankruptcy will allow you to reorganize your financial obligations while the activity continues. It is stated that the company will continue at least part of its crypto mining business to pay off most of the companies that have issued loans. Celsius has 100,000 creditors, including an unsecured $81 million lawsuit from the Cayman Islands-based Pharos Foundation and an unsecured $12 million loan to Alameda Research.
While Celsius Mining uses ASIC machines, we are also seeing a drop in prices for used PC hardware, as more and more video cards that were once used by amateur miners are hitting the trading floors.
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