Celsius elicits mixed signals as it announces plans to unstake $468 ETH

Crypto lender Celsius wants to unstake its Ether holdings to meet the costs of its restructuring plan. The embattled crypto firm says the funds raised will be used to pay its creditors.

Celsius will unstake existing ETH holdings, which have provided valuable staking rewards income to the estate, to offset certain costs incurred throughout the restructuring process

— Celsius (@CelsiusNetwork) January 4, 2024

Celsius’s move comes after the Southern District of New York Bankruptcy Court approved its restructuring plan in November. The plan included the creation of a new entity focused on mining and staking.

Celsius filed for bankruptcy in July 2022 at the height of crypto turmoil, in a year that saw its peer Voyager Digital go a similar route. Crypto exchange FTX also collapsed, with investors’ funds trapped.

Controls nearly a third of ETH in the staking withdrawal queue

The move by Celsius is significant for the world’s second-largest cryptocurrency. Data by blockchain analytics firm Nansen shows that Celsius controls 206,300 ETH, or nearly a third of the ETH, in the staking withdrawal queue. The ETH is valued at about $468 million. The firm has already sent over 30,000 ETH to crypto custody Fireblocks in the last seven days.

Consequently, the unstaking of Ether has raised eyebrows over the potential dumping of tokens on the markets, potentially affecting the price of the cryptocurrency. However, some believe it actually sets ETH for a positive trajectory in the coming weeks. X user WazzCrypto shared his views with his over 6,500 followers, pointing out that Celsius’s exit on staked ETH lifts a huge burden on the token.

While the ETH price was little changed at the time of this publication, Celsius staking rewards have been one of the factors associated with the negative sentiment on ETH in recent months. As such, the unstaking of the tokens could lift the mood on ETH and ease the recent selling pressure.

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