Bitcoin Drops 14% as Celsius Shuts the Vault
On Monday, the crypto world went through a roller‑coaster: Bitcoin slid 14%, reaching its lowest in 18 months at US$22,725, then clawed back to US$23,265. Ethereum followed suit, tumbling 18% to a US$1,176 dip, the lowest since January 2021.
What Happened?
- Celsius Network — a New Jersey‑based crypto lender with US$11.8 billion in assets — froze withdrawals and transfers.
- Investor panic spread like a viral meme, pushing the entire crypto market below US$1 trillion for the first time since January 2021.
- No comment from Celsius CEO Alex Mashinsky; silence just added fuel to the fire.
Why This Matters
“Everything looks like a house of cards,” said Cory Klippsten, CEO of Swan Bitcoin. “Crypto is over‑leveraged—one misstep and the whole thing could tumble.”
Financial strategists warn that falling token prices may trigger margin calls, potentially spiralling into other asset classes.
The Bigger Picture
Github of monetary chaos:
- Inflation spikes on Friday led to a sharp sell‑off across markets.
- The Fed’s aggressive balance‑sheet expansion is blamed for inflating tech and crypto bubbles.
- Past collapses—TerraUSD, Luna, and even Tether’s brief slip from its $1 peg—have shaken confidence.
BlockFi, another lending champ, announced a 20% cut in staffing, citing “dramatic shift in macroeconomic conditions.” They have no exposure to Celsius, but the color of crisis is evident.
Stat in a Nutshell
Bitcoin’s price is flat‑lined at about a 50% loss this year, while Ethereum has slid over 67%. The crypto market’s volatility is more than just numbers; it’s a cocktail of risk, regulation, and market sentiment.
In the words of Jay Hatfield, CIO at Infrastructure Capital Management: “The Fed’s overexpansion of its balance sheet has brewed bubbles everywhere, including crypto.” The market’s at a rainy juncture—hold onto your digital assets and keep an eye on the financial weather report.
Crypto lending
Getting Burned on Celsius?
So, Celsius promised you a juicy 18.6% annual return if you shuffled your crypto over to their app. Their slogan? “Earn high. Borrow low.” Sounds great—like a game you know how to win, right?
Fast‑forward to Sunday night, and the company hit the brakes. They froze all withdrawals and even cross‑account transfers—a classic “hold the line” move. The official message? “We’re doing this so our liquidity sits steady and we can keep your assets safe.” They’re basically saying, “Hold up, we’re putting a lid on this so we can pay you back without going belly‑aground.”
Under the hood, Celsius’s native token is on a wild rollercoaster. In the last year, it slashed roughly 97% of its value, falling from $7 to a mere $0.20. CoinGecko confirms the drop, and that’s a harsh reality check for anyone who thought they’d sit back and watch their digital pounds stack up.
Bottom line? Celsius is chilling its services to keep the ship afloat, but the flight price of its coin has taken a steep nosedive. If you’re still eyeing that big return, it might be worth weighing whether you’re ready to park your funds for a while – or look for greener pastures where the skies are a bit less stormy.
‘Grey area’
Crypto Lending Boom Turns Regulators Poised to Play Catch‑and‑Release
In the last 12 months, crypto lending firms have poured in the money like it’s a free‑for‑all pop‑corn sale. That surge is sending regulators flailing at the sidelines, worried that unregulated products could leave investors flat‑lined and the crypto market in a dangerous financial snowball.
The “Grey‑Area” Gambit
Matthew Nyman from CMS law firm calls the scene a regulatory grey area—the part between “approved” and “completely illegal.”
Celsius: The Crunch‑Time Giant
- Last year, the company hauled in $750 million from sources like Quebec’s big pension fund (Caisse de Dépôt et Placement du Québec).
- Initial valuation: US$3.25 billion.
- As of May 17, Celsius claimed $11.8 billion in assets—half of what it had in October.
- They’ve already processed $8.2 billion in crypto loans.
- At the time of the last CEO comment, the figures were $25 billion in assets—almost a tidy double of the current net worth.
Enter Nexo: “Can We Take Your Collateral?”
Crypto lender Nexo offered to scoop up Celsius’s outstanding loans. The co‑founder, Antoni Trenchev, said, “We reached out to Celsius Sunday morning to discuss the acquisition of its collateralised loan portfolio. So far, Celsius has chosen not to engage.”
Remember, Celsius hasn’t responded to any questions about the offer.
Bottom Line
The crypto lending scene feels like a high‑stakes game of Monopoly: every move could land you in a Bankrupt zone, and the rules are still being drafted. Regulators are watching every roll, hoping to protect all the players before the house comes out in the last round.
