Celsius Crypto Fire Sale Begins: $63M of $160M Sent to Exchange

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The crypto world is watching closely as Celsius Network's long-anticipated asset liquidation appears to be in motion. Over $63 million worth of digital assets** have already been moved from cold storage to an institutional exchange, marking the beginning of a broader fire sale expected to total **$160 million. This development comes ahead of planned user payouts and has sparked renewed volatility across several major altcoins.

Celsius received court approval in early July to begin converting select cryptocurrencies into Bitcoin (BTC) and Ether (ETH) — a critical step in its bankruptcy restructuring. However, no on-chain activity was observed until last Wednesday, when the company initiated withdrawals via Fireblocks, pulling more than $60 million in tokens from secure storage.

Among the assets transferred were significant holdings in Chainlink (LINK), Aave (AAVE), Polygon (MATIC), Binance Coin (BNB), and Synthetix (SNX), along with smaller positions in DeFi staples like 1inch (1INCH) and SushiSwap (SUSHI).

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As of publication, approximately $63.3 million in crypto has been sent to FalconX, a leading institutional trading platform catering to hedge funds and enterprises. Notably, no BTC or ETH has flowed back into Celsius’ wallets yet, leaving uncertainty around whether these deposits are being actively sold or held pending execution.

Market Reactions: Altcoin Volatility Intensifies

The immediate market reaction has been mixed but telling. Since Friday night, several assets named in Celsius’ liquidation plans have seen price declines ranging from 3.7% to 7.4%, including:

In contrast, some tokens not yet visibly affected by the transfers — such as 1INCH, SUSHI, and COMP (Compound) — have surged between 11.3% and 31.5%, possibly due to speculative buying or unrelated protocol developments.

While Bitcoin has remained relatively stable — down only 0.45% — the divergence in altcoin performance underscores investor sensitivity to supply shocks, especially from large, distressed holders like bankrupt crypto lenders.

"Even if Celsius’ total sell-off represents a small fraction of daily trading volume, sentiment can drive outsized moves in low-liquidity altcoins," said one on-chain analyst.

Still, it’s too early to definitively link recent price drops directly to Celsius’ actions. The firm may be utilizing over-the-counter (OTC) desks for bulk sales, which minimize market impact by avoiding open exchanges. Such private transactions leave little public footprint, making real-time tracking difficult.

Stablecoin Strategy Could Support Bullish Pressure

An often-overlooked aspect of Celsius’ liquidation plan involves its substantial stablecoin reserves. These will also be converted into BTC and ETH — effectively increasing demand for the two largest cryptocurrencies.

This process, though technically a "sale" of stablecoins, actually functions as a buy order for BTC and ETH, potentially exerting upward pressure on their prices. If executed at scale, this could partially offset bearish sentiment generated by altcoin disposals.

However, market psychology tends to focus more on visible sell-offs than quiet accumulation. As such, the narrative of a “fire sale” may dominate headlines regardless of actual execution methods.

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Broader Implications: Bankruptcy Fallout and Regulatory Scrutiny

Celsius filed for Chapter 11 bankruptcy in July 2022 amid the cascading failures triggered by the collapse of Terra and Three Arrows Capital. Since then, it has owed an estimated $4.7 billion to creditors, with users awaiting partial recoveries under proposed restructuring plans.

Adding to the complexity, founder and former CEO Alex Mashinsky was arrested last week and charged with multiple federal offenses, including market manipulation, securities fraud, commodities fraud, and wire fraud. The U.S. Commodity Futures Trading Commission (CFTC) and Federal Trade Commission (FTC) are both involved in litigation against him.

Despite its insolvency, Celsius continues to generate revenue through passive income streams — most notably from Miner Extractable Value (MEV) rewards on staked Ethereum. In just ten months, these activities have accrued over $10 million, further complicating asset distribution debates among stakeholders.

What’s Next for Affected Holders?

For investors holding LINK, AAVE, MATIC, and other assets in Celsius’ disposal pipeline, the key takeaway is preparedness. While the total liquidation amount ($160M) pales in comparison to global crypto trading volumes, localized sell pressure — combined with fear-driven trading behavior — can still trigger sharp corrections.

Users should monitor:

Additionally, diversifying exposure and setting volatility-based stop-loss mechanisms may help mitigate risk during this uncertain phase.

Frequently Asked Questions (FAQ)

Q: Is Celsius selling all its crypto at once?
A: No. The liquidation is expected to occur gradually over time to minimize market disruption. Only about $63M of the planned $160M has been moved so far.

Q: Are Bitcoin and Ethereum being sold?
A: Not currently. Celsius is converting other cryptocurrencies into BTC and ETH, which means it’s accumulating — not selling — these two assets.

Q: Could this crash altcoin prices?
A: A full market crash is unlikely. However, short-term downward pressure on specific tokens like LINK or AAVE is possible, especially if sales accelerate on public exchanges.

Q: How are stablecoins involved in the liquidation?
A: Celsius holds significant stablecoin reserves that will be used to purchase BTC and ETH. This buying activity could support prices for those two leading cryptos.

Q: Will users get their funds back?
A: Under current restructuring proposals, users are expected to receive partial repayments, but timelines and percentages remain subject to court approval and asset liquidation progress.

Q: Can I track Celsius’ transactions myself?
A: Yes. Blockchain analytics platforms allow you to monitor wallet movements in real time. Look for transactions involving Fireblocks or FalconX-linked addresses.

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Final Thoughts

While Celsius’ fire sale is underway, its true impact remains nuanced. Direct price effects may be limited due to OTC channels and staggered execution — but psychological ripple effects are undeniable.

For crypto investors, this moment reinforces a core principle: never underestimate the power of perception in digital asset markets. Whether or not $160 million in sales moves markets fundamentally, the fear of it certainly can.

Staying informed, monitoring on-chain data, and adjusting strategies accordingly will be crucial in the weeks ahead as more assets are released into circulation.

Core Keywords: Celsius liquidation, crypto fire sale, Chainlink price drop, Aave token sell-off, Polygon MATIC volatility, Bitcoin accumulation, Ether staking rewards, bankruptcy asset distribution