Celsius bankruptcy could push mining rig prices even lower

midian182

Posts: 8,152   +97
Staff member
In context: The bankruptcy of The Celsius Network could affect more than just its customers, who may never see their money again. The cryptocurrency lending giant owns over 80,000 mining rigs and could now be forced to sell off some of these assets to pay creditors. The result of which would push second-hand-market prices down even further.

The collapse of TerraUSD in May led to decentralized finance (DeFi) platform Celsius freezing withdrawals, swaps, and transfers between customer accounts due to the "extreme market conditions." The company filed for bankruptcy last week, leaving its users concerned about when, or if, they'll get their money back.

Bloomberg reports that Celsius' mining subsidiary also filed for protection. Celsius Mining's filing revealed it owns 80,850 rigs, 43,632 of which are in operation, and expects to run about 120,000 rigs and generate more than 10,000 coins by the end of this year.

It's expected that Celsius Mining will sell off some of its ASIC mining equipment. The problem, however, is that prices of these machines have fallen as much as 50% to a two-year low as the crypto winter continues.

CoinDesk writes that Celsius Mining already auctioned off at least 7,000 of its newly purchased mining rigs in June for a less than market value. And with more mining companies going into liquidation, the trend is expected to continue.

Celsius emphasizes that filing for Chapter 11 bankruptcy will allow it to reorganize its financial obligations while operations continue. The company is expected to carry on at least part of its mining business as a way to pay some of what it owes. Celsius has 100,000 creditors, which includes an $81 million unsecured claim from Cayman Islands-based Pharos Fund and a $12 million unsecured loan to Alameda Research.

While Celsius Mining uses ASIC machines, we're also seeing second-hand PC hardware prices fall as more graphics cards once used by amateur miners land on auction sites.

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maxxcool7421

Posts: 159   +268
""The company is expected to carry on at least part of its mining business as a way to pay some of what it owes. Celsius has 100,000 creditors, which includes an $81 million ***unsecured claim*** from Cayman Islands-based Pharos Fund and a $12 million unsecured loan to Alameda Research.""

Unsecured ... hhhhhhhhhhhhaaaaaaaaaaaaaaaaahahahahahahahahahahahahahahahah.. *****s.
 

emmzo

Posts: 674   +917
Crypto is up atm on a big rally, despite several pyramids falling, like Celsius and 3AC. ETH is pumping like crazy, but funny enough, it surged on the news POS will finally be implemented in September. So, good news, bad news...
 

defaultluser

Posts: 477   +366
Crypto is up atm on a big rally, despite several pyramids falling, like Celsius and 3AC. ETH is pumping like crazy, but funny enough, it surged on the news POS will finally be implemented in September. So, good news, bad news...


well, you know, it always sucks when any something so widely-traded can **** in value by 20% inn a single day.

ETh at least has some reasoning - that Btc ship will right itself downwards by he end if the week,
 

umbala

Posts: 689   +1,248
Crypto is up atm on a big rally, despite several pyramids falling, like Celsius and 3AC. ETH is pumping like crazy, but funny enough, it surged on the news POS will finally be implemented in September. So, good news, bad news...
Oh yes, huuuge rally! Bitcon is currently trading at around $22,000 up from $20,000 a week ago... considering it used to be $60,000+ a year ago, this is huge! hahaha. This reminds me of those people who go to the casino all the time and lose lots of money, then one day they hit it big and start bragging about how they won a few thousand dollars and it's such a huge deal. Meanwhile, they're still down tens of thousands of dollars overall.

tl;dr Invest all your money in crypto, the only "investment" where you can lose 90%+ of your money overnight!
 

umbala

Posts: 689   +1,248
I love how they came up with a cute name "crypto winter" for the current situation where millions of people lost their investment in these crypto-Ponzi schemes. The cute name implies it's no big deal, because these things are cyclical; winter is followed by spring and then summer, like it does in nature! So it's all good, you just have to wait and soon enough you'll be a millionaire again... on paper anyway.
 

emmzo

Posts: 674   +917
Oh yes, huuuge rally! Bitcon is currently trading at around $22,000 up from $20,000 a week ago... considering it used to be $60,000+ a year ago, this is huge! hahaha. This reminds me of those people who go to the casino all the time and lose lots of money, then one day they hit it big and start bragging about how they won a few thousand dollars and it's such a huge deal. Meanwhile, they're still down tens of thousands of dollars overall.

tl;dr Invest all your money in crypto, the only "investment" where you can lose 90%+ of your money overnight!
Well, I, personally, want to see it traded for pizzas again. But I fear it will keep on going solid until the last fool is rekt and we all know there's an endless supply of those.
 

Hooda Thunkett

Posts: 16   +18
I'm thinking of buying one of those Antminers. Not to mine with, just to put in a display case so I can show it to my grandchildren to give them something concrete to hold and connect to the whole "crypto madness" episode from the "Weird '20's" chapter of their history books.
 

NightAntilli

Posts: 911   +1,184
Ah the crypto hatred is in full force. Seems like a buy signal to me :)

In any case... What everyone here fails to understand is that the failure of Celsius is the fault of the traditional financial system. The borrowing and lending takes place behind the scenes and based on trust, particularly in 3AC. After 3AC mismanaged the funds, Celsius was also hit. They had more loan than collateral, and the obvious result is collapse.

In DeFi, your collateral is ALWAYS more than the loan. This whole thing is therefore impossible is DeFi. If anything, events like these prove why we need to avoid intermediaries and take custody of our own funds.

The main risk with DeFi is hacks, and even that risk is at least partially in the hand of the user.
 

emmzo

Posts: 674   +917
Ah the crypto hatred is in full force. Seems like a buy signal to me :)

In any case... What everyone here fails to understand is that the failure of Celsius is the fault of the traditional financial system. The borrowing and lending takes place behind the scenes and based on trust, particularly in 3AC. After 3AC mismanaged the funds, Celsius was also hit. They had more loan than collateral, and the obvious result is collapse.

In DeFi, your collateral is ALWAYS more than the loan. This whole thing is therefore impossible is DeFi. If anything, events like these prove why we need to avoid intermediaries and take custody of our own funds.

The main risk with DeFi is hacks, and even that risk is at least partially in the hand of the user.
It would be a buy signal if the opinions expressed here were those of rekt moonboys, but it's not the case.
Also, Celsius is a DeFi platform, but nice try blaming the traditional financial system. Technically, you can't borrow more than collateral in the traditional too, but there are loopholes to both.
 
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NightAntilli

Posts: 911   +1,184
It would be a buy signal if the opinions expressed here were those of rekt moonboys, but it's not the case.
Partially true. All the bad press also counts.

Also, Celsius is a DeFi platform, but nice try blaming the traditional financial system.
Celsius is not a DeFi platform. They are by definition a centralized entity that works as an intermediary. With DeFi, there are no intermediaries aside from the protocol. That they have used DeFi does not make them a DeFi platform.
Examples of DeFi platforms are Uniswap and Aave, where everything happens at the protocol level, and not in the background with hedge funds like Celsius did.

Technically, you can't borrow more than collateral in the traditional too, but there are loopholes to both.
On paper you're not allowed to borrow more than your collateral in TradFi, but obviously it happens, because the human element is involved. But take a look at a simple example; mortgages. You can get a mortgage before the house is built. You are using a future asset as collateral. This is obviously a risk, because the asset might not be worth what it was supposed to be worth, for example. This is a high risk for both borrower and lender, which is simply not seen in DeFi.

With DeFi you can use leverage by re-using your loaned out assets as collateral to borrow more, but generally the borrow limit is capped at 50% at the protocol level, meaning you can't do it infinitely. Liquidation also happens automatically, meaning, funds will never magically disappear. The lender's funds are always guaranteed.