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Author Topic: Less Worry: Celcius paid off its $114 million Bitcoin-backed loan in 24 hours.  (Read 291 times)
Mark301 (OP)
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July 06, 2022, 07:46:24 AM
 #1

Users of the crypto lending platform have finally felt some relief following Celcius Network's announcement that it has paid a total of $114 Million of its Bitcoin loan in the last 24 hours, lowering its liquidation price to $4,967

This means that the Bitcoin price must fall below $4,967 before Celcius is liquidated.


Source/Continue Reading: https://mycryptoparadise.com/less-anxiety-as-celcius-paid-114-million-of-its-bitcoin-backed-loan-in-24-hours/
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July 06, 2022, 07:54:59 AM
 #2

Information you used is outdated. Currently the liquidation price of Celcius position is much much lower. It's $2,772.

With this liquidation price, I think risk for Celcius is zero. This is a booster for Bitcoin market to recovery mildly in last 24 hours.

Get data from that page: https://oasis.app/25977#Overview

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July 06, 2022, 08:03:51 AM
 #3

Why is Celsius paying-off debt?

Of course, lowering the liquidation price for their WBTC. I got you! But, this was important when liquidation price was around 20k.
Now it's <3k, and they're still paying off debt. Anyone knows the reason for this?

How is this seen in the light of a potential bankruptcy? You are not allowed to choose, whom you pay off and whom not, when filing for bankruptcy.
It does not make really sense to me.
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July 06, 2022, 08:08:23 AM
 #4

Why is Celsius paying-off debt?

Of course, lowering the liquidation price for their WBTC. I got you! But, this was important when liquidation price was around 20k.
Now it's <3k, and they're still paying off debt. Anyone knows the reason for this?

How is this seen in the light of a potential bankruptcy? You are not allowed to choose, whom you pay off and whom not, when filing for bankruptcy.
It does not make really sense to me.

I think the main thing was to lower the liquidation price, as you said. In a bankruptcy you can't do anything, the bankruptcy administrator take the remaining assets and liquidate them to pay the liabilities, partially, obviously, and how the payments are allocated and in what amounts depends on the regulations that are executed by the bankruptcy administrator.

But I think lowering liquidation price was precisely to avoid banruptcy risk.

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franky1
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July 06, 2022, 08:21:32 AM
 #5

instead of being in debt to some class action suit of millions of customers. they have relieved the customer debt(users of locked coin). by replacing it with corporate debt

in short.
a corporation injected them with alot of cash. which they bought up alot of coin.
now they have more coin holdings which they can put up as more collateral behind the scenes to save off any liquidation.

there is ~$440m of coins locked(~21000coins). and G.Sachs just handed them $2b to pull them out of the water of liquidation.
this means they are out of the customer liquidation pond and now in the G.Sach debt lake

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July 06, 2022, 08:46:48 AM
 #6

Why is Celsius paying-off debt?

Of course, lowering the liquidation price for their WBTC. I got you! But, this was important when liquidation price was around 20k.
Now it's <3k, and they're still paying off debt. Anyone knows the reason for this?

How is this seen in the light of a potential bankruptcy? You are not allowed to choose, whom you pay off and whom not, when filing for bankruptcy.
It does not make really sense to me.

I think the main thing was to lower the liquidation price, as you said. In a bankruptcy you can't do anything, the bankruptcy administrator take the remaining assets and liquidate them to pay the liabilities, partially, obviously, and how the payments are allocated and in what amounts depends on the regulations that are executed by the bankruptcy administrator.

But I think lowering liquidation price was precisely to avoid banruptcy risk.

Thank you for your explanation. I think you are right, but does this mean Celsius thinks Bitcoin will dip to the 3k area in the near future?
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July 06, 2022, 08:55:58 AM
Last edit: July 06, 2022, 09:08:41 AM by franky1
 #7

Thank you for your explanation. I think you are right, but does this mean Celsius thinks Bitcoin will dip to the 3k area in the near future?

no. its just math..

if they had $114m debt. to customers.
and they now have $2b from G.Sachs
then thats a simple maths X factor that brings position down from $21k threshold down to a lower threshold before liquidating

I DO NOT TRADE OR ACT AS ESCROW ON THIS FORUM EVER.
Please do your own research & respect what is written here as both opinion & information gleaned from experience. many people replying with insults but no on-topic content substance, automatically are 'facepalmed' and yawned at
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July 06, 2022, 09:08:29 AM
 #8

Thank you for your explanation. I think you are right, but does this mean Celsius thinks Bitcoin will dip to the 3k area in the near future?

no. its just math..

if they have $114m debt. to customers.
and they now have $2b from G.Sachs
then thats a simple maths X factor that brings position down from $21k threshold down to a lower threshold before defaulting.

And where does all this put customers whose funds are locked up? I mean, what's their likely end-game? As soon as they are opening up withdrawals, people will withdraw their funds immediately. Celsius reputation is destroyed and i don't see any viable option to restore it. What is your opinion?
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July 06, 2022, 09:22:39 AM
Merited by ObscurePen (1)
 #9

Thank you for your explanation. I think you are right, but does this mean Celsius thinks Bitcoin will dip to the 3k area in the near future?

no. its just math..

if they have $114m debt. to customers.
and they now have $2b from G.Sachs
then thats a simple maths X factor that brings position down from $21k threshold down to a lower threshold before defaulting.

And where does all this put customers whose funds are locked up? I mean, what's their likely end-game? As soon as they are opening up withdrawals, people will withdraw their funds immediately. Celsius reputation is destroyed and i don't see any viable option to restore it. What is your opinion?

the customer debt has been pretty much made whole again. celsius shouldnt really owe customers anything.
celsius now owes g.sachs

celsius now has enough coins to honour the sidechain locks of customers

..
my opinion.
(i have not gone through all the numbers so treat this as a rough guess, dont query the numbers. query the methodology)

celsius had 21,000 coins locked up to the sidechain(customer locks) but had mismanaged and only had ~15k to allow for withdrawal which caused them problems. of a $114m deficiit(pencil math of 5k coin)

celsius then took on another deal with G.sachs where by G.sachs gave them $2b. which was used to (i guess) buy ~100k coins
celsius can now make customers whole as there are alot of coin now free floating to honour withdrawals. and the remainder is then locked up as new collateral (not the customer stuff) with a escrow with g.sachs who is set a contract for a lower liquidation number should celsius run into trouble and default on g.sachs obligations

.. end goal
.. a waiting game for the g.sachs/celsius partners

waiting for bitcoin price to move up.. lets imagine it went to 2x ($39k)
that 95k coin spare becomes worth $3.7bill so celsius pays off g.sachs $2b+ interest/profit..  and celsius keeps the remainder as free money for celsius.
or
g.sachs stays in partnership and they both share the profits.. or they keep it in coin form and wait for a different higher number

I DO NOT TRADE OR ACT AS ESCROW ON THIS FORUM EVER.
Please do your own research & respect what is written here as both opinion & information gleaned from experience. many people replying with insults but no on-topic content substance, automatically are 'facepalmed' and yawned at
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July 06, 2022, 09:30:48 AM
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People will keep going there. Now they are trustworthy because they are "paying back". People will keep shilling and new comers will still register and use the shitty platform! And then, shit will hit the fan again. Maybe by that time, a rug pull will be confirmed! People don't learn!

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July 06, 2022, 09:37:28 AM
 #11

Thank you for your explanation. I think you are right, but does this mean Celsius thinks Bitcoin will dip to the 3k area in the near future?

no. its just math..

if they have $114m debt. to customers.
and they now have $2b from G.Sachs
then thats a simple maths X factor that brings position down from $21k threshold down to a lower threshold before defaulting.

And where does all this put customers whose funds are locked up? I mean, what's their likely end-game? As soon as they are opening up withdrawals, people will withdraw their funds immediately. Celsius reputation is destroyed and i don't see any viable option to restore it. What is your opinion?

the customer debt has been pretty much made whole again. celsius shouldnt really owe customers anything.
celsius now owes g.sachs

celsius now has enough coins to honour the sidechain locks of customers

..
my opinion.
(i have not gone through all the numbers so treat this as a rough guess, dont query the numbers. query the methodology)

celsius had 21,000 coins locked up to the sidechain(customer locks) but had mismanaged and only had ~15k to allow for withdrawal which caused them problems. of a $114m deficiit(pencil math of 5k coin)

celsius then took on another deal with G.sachs where by G.sachs gave them $2b. which was used to (i guess) buy ~100k coins
celsius can now make customers whole as there are alot of coin now free floating to honour withdrawals. and the remainder is then locked up as new collateral (not the customer stuff) with a escrow with g.sachs who is set a contract for a lower liquidation number should celsius run into trouble and default on g.sachs obligations

.. end goal
.. a waiting game for the g.sachs/celsius partners

waiting for bitcoin price to move up.. lets imagine it went to 2x ($39k)
that 95k coin spare becomes worth $3.7bill so celsius pays off g.sachs $2b+ interest/profit..  and celsius keeps the remainder as free money for celsius.
or
g.sachs stays in partnership and they both share the profits.. or they keep it in coin form and wait for a different higher number


Thanks for your opinion. Truly appreciate it. Hopefully people take it as a lesson bc "Not your keys, not your coins", even if they get lucky this time.
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July 06, 2022, 10:38:24 AM
 #12

People will keep going there. Now they are trustworthy because they are "paying back". People will keep shilling and new comers will still register and use the shitty platform! And then, shit will hit the fan again. Maybe by that time, a rug pull will be confirmed! People don't learn!

I am hopeful that with every broken shitcoin casino, more and more people will understand the importance of "Not your keys, not your coins."
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July 06, 2022, 10:55:57 AM
 #13

Thank you for your explanation. I think you are right, but does this mean Celsius thinks Bitcoin will dip to the 3k area in the near future?

no. its just math..

if they have $114m debt. to customers.
and they now have $2b from G.Sachs
then thats a simple maths X factor that brings position down from $21k threshold down to a lower threshold before defaulting.

And where does all this put customers whose funds are locked up? I mean, what's their likely end-game? As soon as they are opening up withdrawals, people will withdraw their funds immediately. Celsius reputation is destroyed and i don't see any viable option to restore it. What is your opinion?

the customer debt has been pretty much made whole again. celsius shouldnt really owe customers anything.
celsius now owes g.sachs

celsius now has enough coins to honour the sidechain locks of customers

..
my opinion.
(i have not gone through all the numbers so treat this as a rough guess, dont query the numbers. query the methodology)

celsius had 21,000 coins locked up to the sidechain(customer locks) but had mismanaged and only had ~15k to allow for withdrawal which caused them problems. of a $114m deficiit(pencil math of 5k coin)

celsius then took on another deal with G.sachs where by G.sachs gave them $2b. which was used to (i guess) buy ~100k coins
celsius can now make customers whole as there are alot of coin now free floating to honour withdrawals. and the remainder is then locked up as new collateral (not the customer stuff) with a escrow with g.sachs who is set a contract for a lower liquidation number should celsius run into trouble and default on g.sachs obligations

.. end goal
.. a waiting game for the g.sachs/celsius partners

waiting for bitcoin price to move up.. lets imagine it went to 2x ($39k)
that 95k coin spare becomes worth $3.7bill so celsius pays off g.sachs $2b+ interest/profit..  and celsius keeps the remainder as free money for celsius.
or
g.sachs stays in partnership and they both share the profits.. or they keep it in coin form and wait for a different higher number


Thanks for your opinion. Truly appreciate it. Hopefully people take it as a lesson bc "Not your keys, not your coins", even if they get lucky this time.

Maybe this time they are profitable, but in the future people will definitely think about it a second time and don't want to be trapped in things that are detrimental to them, right?
So if some of us can take a good lesson for the future, of course it is a very valuable thing for us together.

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July 06, 2022, 11:03:24 AM
 #14

Thank you for your explanation. I think you are right, but does this mean Celsius thinks Bitcoin will dip to the 3k area in the near future?

no. its just math..

if they have $114m debt. to customers.
and they now have $2b from G.Sachs
then thats a simple maths X factor that brings position down from $21k threshold down to a lower threshold before defaulting.

And where does all this put customers whose funds are locked up? I mean, what's their likely end-game? As soon as they are opening up withdrawals, people will withdraw their funds immediately. Celsius reputation is destroyed and i don't see any viable option to restore it. What is your opinion?

the customer debt has been pretty much made whole again. celsius shouldnt really owe customers anything.
celsius now owes g.sachs

celsius now has enough coins to honour the sidechain locks of customers

..
my opinion.
(i have not gone through all the numbers so treat this as a rough guess, dont query the numbers. query the methodology)

celsius had 21,000 coins locked up to the sidechain(customer locks) but had mismanaged and only had ~15k to allow for withdrawal which caused them problems. of a $114m deficiit(pencil math of 5k coin)

celsius then took on another deal with G.sachs where by G.sachs gave them $2b. which was used to (i guess) buy ~100k coins
celsius can now make customers whole as there are alot of coin now free floating to honour withdrawals. and the remainder is then locked up as new collateral (not the customer stuff) with a escrow with g.sachs who is set a contract for a lower liquidation number should celsius run into trouble and default on g.sachs obligations

.. end goal
.. a waiting game for the g.sachs/celsius partners

waiting for bitcoin price to move up.. lets imagine it went to 2x ($39k)
that 95k coin spare becomes worth $3.7bill so celsius pays off g.sachs $2b+ interest/profit..  and celsius keeps the remainder as free money for celsius.
or
g.sachs stays in partnership and they both share the profits.. or they keep it in coin form and wait for a different higher number


Thanks for your opinion. Truly appreciate it. Hopefully people take it as a lesson bc "Not your keys, not your coins", even if they get lucky this time.

Maybe this time they are profitable, but in the future people will definitely think about it a second time and don't want to be trapped in things that are detrimental to them, right?
So if some of us can take a good lesson for the future, of course it is a very valuable thing for us together.

Absolutely.
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July 06, 2022, 11:20:31 AM
 #15

lesson to learn

dont trust sidechain/token collateral especially not for long time hoarding

if it aint the real asset, dont be talked into a pegged asset hoarding pretending its the real asset. as thats just a risk of 'double dipping' ability(depegging, bugs, network issues if not a secure network)

second lesson to learn.. if you are a lil foolish to have things locked on a sidechain, as your hoard token.. then dont have that sidechain token also then locked in a custodian whereby you have no way to move, exchange, sell or withdraw it should a COMPANY "freeze accounts"
as thats a risk of "triple dipping" should the company not play by the rules/customers expectations

EG. if a company is doing funny business. if you have your value as bitcoin on your own private key. it wont matter about the funny business. you can just take your funds elsewhere

EG if a lil foolish to have it on a sidechain. again dont hoard long time in a custodian. have it as a private key of that sidechan.. there may be less companies to choose from but you still have a little bit of choice.

but if its locked in a custodian wrapped in a sidechain your double/triple stuck, left only to pray on their mercy and luck of their business decision

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July 06, 2022, 11:46:03 AM
 #16

People will keep going there. Now they are trustworthy because they are "paying back". People will keep shilling and new comers will still register and use the shitty platform! And then, shit will hit the fan again. Maybe by that time, a rug pull will be confirmed! People don't learn!

Going to disagree with you a bit here. Since GS is involved I think it's going to be run a bit more like a money hoarding ridiculously high interest & fees business.
Someone @ GS did a bunch of math and made some assumptions and came out with a way to fleece more people. It's now more Celcius has GS as a partner. So you might make less and others might pay more but it's safe. All the while since GS does have funds it all looks more secure.

I don't think there will be a rug pull, just a slow bleed as people see how much this is costing them and they leave and go someplace else. And then they ones that stayed till the end are absorbed into the GSCoin empire.

Just my view.

-Dave

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July 06, 2022, 11:54:28 AM
 #17

I don't think there will be a rug pull, just a slow bleed as people see how much this is costing them and they leave and go someplace else. And then they ones that stayed till the end are absorbed into the GSCoin empire.

Sounds precisely like how many of were trapped in the [insert Southeast Asian government name]coin empire.

Pensions are a huge ponzi that has been limiting withdrawals to retirees slowly over the past decades. Government bonds keep raising interest so people feel less bad about cash stuck in schemes, and some actually are convinced to buy into longer, deeper locks. But every time it gets to critical point, some other foreign government invests more (think of this as GS) to share the risk, while money printing slaps on more band aids.

No realistic rug pull happening in our lifetimes but everyone bleeds, just a game of who has more blood to let before they pack up and go (literally) or simply live miserably into oblivion or go off grid and return to monke in our vast forests. My remote village has suddenly been seeing more newcomers in past few years when it had actually been in population decline since the 1970s.

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July 06, 2022, 11:56:45 AM
 #18

Looks like they are preparing for Chapter 11 bankruptcy as they changed their board: https://www.reddit.com/r/CelsiusNetwork/comments/vsmets/update_of_the_whole_celsius_board/

I am not for the U.S. Could anyone explain it to me what it would mean for depositors?
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July 06, 2022, 12:12:55 PM
 #19

Looks like they are preparing for Chapter 11 bankruptcy as they changed their board: https://www.reddit.com/r/CelsiusNetwork/comments/vsmets/update_of_the_whole_celsius_board/

I am not for the U.S. Could anyone explain it to me what it would mean for depositors?

thats not a bankruptcy smell in the air..(it could be, but not always the case)
it could be just changing the management because celsius badly managed the deals prior.
G.Sachs wont trust $2b to the old bad managers.

usually when partnering  with big money (sly version of corporate takeover, hidden as just a financial deal)
managements do change

G.sach's from their fiat regulatory level dont want to appear as having a bad liability company as their subsidiary so on paper its just paper contract of a loan to a private company. but yea reality is the bad managers got replaced by G.sachs trusted guys, while being the puppet master of said company.

that said..
some large companies do buy small companies to strip them of their good assets. and fill the under-company with the larger companies bad assets. and then offload/cut the smaller under-company off as a complete loss.. taking the good companies bad assets with them too.
so maybe a possibility. but too early to tell.

edit to reply to below
(might take longer then a lunchbreak coffee.. wait for your weekend shot of whisky and see what next week brings)

I DO NOT TRADE OR ACT AS ESCROW ON THIS FORUM EVER.
Please do your own research & respect what is written here as both opinion & information gleaned from experience. many people replying with insults but no on-topic content substance, automatically are 'facepalmed' and yawned at
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July 06, 2022, 12:17:35 PM
 #20

Drink Coffee and see. Thank you Mate.
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