While retail crypto investors winced over the news of Celsius pausing withdrawals, analysts were mixed as some criticized the move while others said Celsius could be protecting user funds; BTC falls below $23K shauryamalwa and JPRubin23 report
"As far as support levels, the next few days surely will test digital assets if a faster pace of tightening and more aggressive rate hikes are announced," Uphold's Blake wrote."For the moment, extreme market conditions and fed policy updates are exacerbating the consequences for crypto assets."Prominent crypto lending firm Celsius paused withdrawals and swap products early Monday, citing"extreme market conditions” amid a market downturn.
“I think that this decision was made while taking the Black Thursday of 2020 as prices of major cryptocurrencies fell steeply and caused a cascade of liquidations on lending platforms and its users lost their money,” Kurbanova explained. “Celsius is sending out a message that it is currently insolvent and this is bound to usher in an unprecedented panic withdrawal whenever this access is granted to users. The crypto ecosystem does not respond well to panic events, and unless this is adequately managed,” Synegin added.
“During the last few days, rumors began to circulate that Celsius had become insolvent due to its high exposure to stETH, the Ethereum derivative by Lido Finance which began to lose its ETH ’peg’ last week,” Pezzotti said in a chat. “Talking about ’peg’ is not totally correct as stETH are derivative instruments collateralized by ETH 1:1.
At Consensus 2022 in Austin, Texas, CoinDesk asked Qureshi to explain crypto’s growing pains, and how he thinks about its longstanding issues. Here’s what he saidWhen you think about privacy, everything you do in DeFi [decentralized finance] is viewable. We've gotten used to that in crypto, but that's not the way of the future.
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