It is unclear how much of those gains are directly related to the supply reduction.
Key Takeaways
- Crypto lending project Celsius carried out its weekly coin burn Friday, coinciding with price gains of roughly 18%.
- Other factors may also be at play, as CEL only saw gains of 2.27% in the three hours following the burn.
- Celsius is one of the most popular crypto lending platforms, with $20 billion of assets under management.
Celsius Network carried out its latest coin burn Dec. 10, reducing its token supply in order to keep prices high.
Celsius Burns $250,000 of CEL
Celsius announced the news on Twitter, noting that as much as 63,502 CEL (worth $250,000) had been burned.
The event seemed to have driven up the value of the project’s token. The price of CEL rose from $3.43 to $4.05 at its highest point, representing an increase of 18.08% over a 24 hour period.
This increase may have been due to activity in anticipation of the burn rather than the effects of the burn itself. While the burn took place at 6:13 PM UTC on Dec. 10, CEL’s initial price surge took place several hours earlier, around 1:00 AM UTC on Dec. 9.
The price increase could also have been influenced by other factors, such as the anticipation of a live appearance of the project team at Real Vision’s “Takeover” event in Las Vegas.
Some community members also suggested that a whale holder sold off a large amount of CEL tokens, though this should have caused the price of CEL to decrease instead of increase.
Regardless, Celsius’ token made slight gains post-burn as well. The price of CEL rose from $3.96 to $4.05 in the three hours following the burn, amounting to gains of 2.27%.
This, however, was canceled out by losses over the next hour, as prices fell back to $3.96 once again.
Celsius Is Popular But Controversial
Celsius is highly dependent on coin burns, as it carries out the process on a weekly basis to achieve deflation.
It remains to be seen whether the value gained through the events of Friday will last, as previous burns have seen a steady decrease in the coin’s value despite any temporary gains.
The news came after two notable controversies for Celsius. The project appeared to have lost funds through a BadgerDAO hack. Additionally, the project’s CFO was arrested in Israel on charges unrelated to that event and unrelated to Celsius itself.
Regardless, Celsius remains popular as a leading crypto lending platform. The firm claimed to have $20 billion in assets under management as of August 2021.