Cryptocurrency markets rallied sharply on Thursday morning as investors rejoiced over increased stability not seen in weeks. Celsius Network, a major cryptocurrency lending and finance company, has officially filed for bankruptcy protection, while Ethereum has moved closer to its proof-of-stake consensus mechanism. Sometimes, simply reducing uncertainty is enough to push cryptocurrencies higher.
In the last 24 hours, at 14.00pm ET, the value of Bitcoin went up by 4,7%, Ethereum by 10,1% and Polygon by 21%. All cryptocurrencies that you can trade on Bitcoin Revolution.
Celsius Network bankrupt
The most important news is that Celsius Network has filed for US bankruptcy protection under Chapter 11, thus putting an end to speculation about the company's future. Management said it has $ 167 million in cash to finance operations, but client funds will now be part of the Chapter 11 process and will not be available on a first-come, first-served basis.
As bad as it is for a company to ask for bankruptcy protection, this brings the Celsius Network saga to something of a conclusion. The company's positions will be dismantled and creditors will be repaid. Eventually, some customers may even get their money back.
In more significant news, Ethereum's ninth shadow fork went live, continuing testing of its proof-of-stake consensus mechanism and moving closer to the merger of the testnet and mainnet. Investors have been waiting for the update as it should reduce transaction costs for Ethereum and increase the number of executable transactions per second.
The leap in cryptocurrency is even more shocking when you consider that US equity markets and global commodity markets are in steep decline today. Equity indices fell nearly 1%, while gold and oil fell 1,6% and 1,3% respectively, as of this writing.
Ethereum expected at the change of course
It will probably take some time for the accumulated positions of the Celsius Network to be liquidated, but at least now there is a path to follow. The market rejoices at this, and I believe it could reduce the amount of leverage in the cryptocurrency market in general.
If Ethereum manages to complete the transition to proof of stake, reduce costs and increase blockchain throughput, it could turn the tables. It is still the largest developer network in the cryptocurrency world, and reducing costs would increase the number of available use cases.
The next few months are likely to continue to be volatile, but the collapse of some leveraged trading platforms that have not added utility to the cryptocurrency industry will likely be a roadblock. In the long run, the cryptocurrency industry will focus on building disruptive new technologies, not new ways to trade assets, and today's news takes everyone a step closer in that direction.