The ongoing drama surrounding Celsius’s native token and its halting withdrawals has stirred significant buzz in the cryptocurrency world. However, Tether, the issuer of the USDT stablecoin, has cleared the air on its involvement—or lack thereof—in this brewing crisis.
Tether’s Assurance Amid Celsius Turmoil
On a Monday filled with crypto discussions, Tether made a point to reassure the public that its USDT reserves remain stable and unaffected by the liquidity issues plaguing Celsius. As reported, Tether’s statement emphasized that their lending practices with Celsius have consistently been ‘overcollateralized’, ensuring that their reserves remain intact.
Why Does This Matter?
While the chaos at Celsius could lead many to connect the dots, Tether clarified that its operations are unaffected. The company noted that the recent turmoil on the Celsius platform reflects broader market volatility and extreme conditions that have been rattling investors everywhere.
Celsius and Its Financial Footprint
In a twist of irony, Tether’s close ties with Celsius don’t stop at lending practices. In 2021, Celsius borrowed a whopping $1 billion from Tether using Bitcoin as collateral. Celsius CEO Alex Mashinsky shared at the time that the interest on this loan hovered between 5% and 6%—not exactly pocket change!
Investing in the Future: Tether’s Equity Stakes
It’s important to note that Tether’s involvement with Celsius isn’t only about lending. The company was an early investor, pouring $10 million into the lending platform back in 2020. However, Tether was quick to point out that this investment had no impact on their own reserves, indicating a significant separation between investment and operational stability.
The Aftermath of a Suspended Platform
As Celsius officially halted all withdrawals on its platform, many investors found themselves holding their breath. The drastic loss of CEL token value—about 50% in just one day—has led to concerns about potential fallout affecting customer funds. Such uncertainties have led some industry observers to speculate that Celsius could be on the verge of collapse, taking customer money with it.
Community Reaction
Just a day before this calamity, Mashinsky attempted to quell fears by labeling rumors of withdrawal issues as ‘FUD and misinformation.’ His confidence didn’t seem to deter skepticism soaring within the Bitcoin community, as many are left pondering the implications of Celsius’s next moves.
Looking Ahead: The Ripple Effects
The ongoing cryptocurrency saga between Celsius and Tether might feel like a soap opera, but the implications are real. As crypto fans watch closely, many are left wondering how this will impact broader market conditions and investor confidence in stablecoins.
Will Tether’s assurances hold up against the tide of market dynamics? Time will tell, but one thing’s for sure; this plot isn’t over yet, and the cryptocurrency community is keeping a keen eye on these developments!
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