Celsius Bankruptcy Could Cripple Bitcoin While Ethereum (+13%) Climbs Higher

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Last Updated on 17 July 2022 by CryptoTips.eu

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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Earlier this week, the troubled Celsius Network filed for bankruptcy. While creditors can now finally start the long process of hoping to recuperate any of their investments with the firm, although it won’t be much, the bankruptcy spells trouble for Bitcoin miners. Meanwhile the price of Bitcoin seems to have found support around the $20k level and Ether is climbing ever higher.

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80,000 mining rigs

Reporting this weekend showed that cryptocurrency platform Celsius Network filed for bankruptcy in the US with a $1.2bn hole in its books after it suffered a digital version of an old-fashioned “run on the bank.”

As the crypto lender gets dissolved, creditors will be hoping they can recuperate at least some of their investments from the sale of remaining assets. A big part of those assets are Bitcoin mining rigs, the sale of which could spell trouble for Bitcoin miners in fact.

Given that Celsius had grown so fast in 2020 and 2021, the company had bought some 80,000 rigs already (of which it operated 43,632) and was hoping to purchase an additional 40,000 rigs by the end of this year.

However, the bankruptcy of Celsius means that 80,000 mining rigs will be released on the open market for sale at the same time, leave other Bitcoin mining companies in trouble.

Matthew Kimmell, digital asset analyst at CoinShares explained that:

Celsius Mining selling machines would add downward pressure to already falling machines prices.

It seems Celsius is aiming to continue at least part of the Celsius Mining operations following the restructuring as a means to generate Bitcoin rewards and pay down some of their outstanding liabilities.

As the market will also be flooded by the Mount Gox dump, we are curious to see what this will mean for the Bitcoin price.

Support line

Ethereum doesn’t seem too concerned about what happens to Bitcoin and the Celsius platform right now. We reported yesterday that the $1,000 support line (which we discussed this Wednesday) held up well and that Ether had already moved 20% higher from that point.

Meanwhile, another 11% has been added and Ether is already at the moment of writing this article Sunday morning, trading at $1,350.