Celsius repays $120 million loan and secures position in Bitcoin

Long singled out for mismanagement of its investments, Celsius has again reassured its investors. The platform repaid $120 million worth of stablecoin DAI on its Bitcoin (BTC) loan position, lowering the liquidation price to $4,967.

https://cryptoast.fr/celsius-rembourse-120-millions-dollars-borrowing-securise-position-bitcoin/

Celsius pays off its debts

This is a case that has been driving the cryptocurrency ecosystem for several weeks now. As a reminder, the platform was accused mismanagement of client funds and overexposure to risky assets. Worse, some experts threatened of potential insolvency in the event of a too sharp fall in the price of Bitcoin (BTC).

Within a few days, Celsius has paid off most of its debt to the Maker DAO decentralized borrowing protocol. These are thus more than $120 million stablecoin DAI that have been refunded, as shown in their movement history:

Movement history of Celsius on its position on Maker DAO

By repaying its debt to Maker DAO, Celsius has reduced the risk of potential liquidation of his position. In decentralized finance, liquidations occur when the value of the collateral deposited as collateral (here Bitcoin) falls below the value of the loan.

Celsius position bitcoin

Information about Celsius positions on Maker DAO

Faced with the recent fall in cryptocurrency prices, Celsius took the lead and thus anticipates a possible fall in Bitcoin well below the $10,000 mark. Indeed, this reimbursement made it possible to lower the liquidation threshold of the position at $4967 per bitcoin.

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These Celsius initiatives are notable given concerns about the solvency of the platform, amid declines in major cryptocurrency market assets. Moreover, these fears were exacerbated when Celsius announced the suspension of transfers and withdrawals from its platform.

For offer attractive returns to its clientsthe lending platform used leveraged loans on independent market makers, especially Maker DAO. When a user buys Bitcoin, Celsius converts it to Wrapped Bitcoin (wBTC) and deposits it as collateral on the Maker protocol to borrow DAI stablecoin.

On June 13, Celsius had over 17,000 wBTC placed in leverage on Maker. This position risked liquidation if Bitcoin fell below $22,500. In anticipation, the platform has thus filed nearly 7,000 wBTC in order to re-collateralize its position.

A few days later, Bitcoin fell further and stabilized at the levels it is currently known to be, namely near $19,000. Still, for the moment, Celsius seems to sail relatively well in this storm she is facing.

👉 File: Celsius Network, why and how is the platform collapsing?

Source: Fig 1 and 2 – Oasis

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