Celsius Network crypto project will be bankrupt by Q4 2022

Celsius network bankrupt

CEL token was created by Celsius Network and it will have zero value by fourth quarter of 2022. Reason is liquidity issues. Celsius Network previously used to allow flexible redemptions allowing anyone to withdraw their funds and forego their interest. This is also done by many centralized cryptocurrency exchanges like Binance where user can withdraw funds anytime by foregoing interest.

The issue is Celsius Network is decentralized and has 73-percent of its Ethereum locked in steth or staked in Ethereum v2 contracts that makes it unavailable for withdrawals. In other words, Celsius is insolvent on its Ethereum positions and mere 27-percent of Celsius is liquid.

This means if Ethereum withdrawals continue can current speed, which is ~50 ETH per week, Celsius will have no available Ethereum in about 5-weeks. Things are not looking good for Celsius Network.

If that was not enough, Celsius Network has invested huge amount of users’ funds in shady cryptocurrency mining operations. We all know this category has heavy outlay, huge risk and low returns. Around 1/3rd of total users’ funds are locked in mining operations.

Celsius network hodl mode

The worst thing they have enforced is forced HODL mode on its users. This means user’s funds are frozen and cannot be moved out until Celsius thinks it’s safe to do so. They ask user’s for more documents when they want to withdraw their funds.

Pair that with losing money in myriad DeFi hacks, it is clear why Celsius Network members are rushing for an IPO to raise funds. Celsius Network lost whopping 35000 Ethereum in Stakehound key loss debacle in May 2021 and another $50M in Badger DAO loss.