Although Celsius Network went bankrupt, the price of its original token, CEL, skyrocketed by thousands of percent, raising question marks among most investors.
Since the collapse of the Terra ecosystem, the Celsius Network has had financial problems, leading to the interruption of all services, such as withdrawals, deposits and transactions.
The company was also on edge bankruptcywhich made the market even more heated and filled with worries, which further slowed down the crypto market in the first half of this year.
Celsius is bankrupt, but token prices are skyrocketing
Based on the report Cointelegraph, Celsius has customer obligations and a balance sheet gap of around USD 1.2 billion.
Previously, the cryptocurrency lending company filed for bankruptcy protection, so there appears to be no long-term profitable prospects for the company, or the original token.
However, instead of free-falling, the price of the CEL token has skyrocketed by more than 4,000 percent in the last two months, or since the beginning of the second half of this year. The price in June was around $0.093 and currently the price is in the range of level 3.80 US dollars.
Of course, this is a big question mark, especially for investors who don’t exactly follow the trajectory of Celsius’ fortunes, where major cryptocurrencies like Bitcoin and Ether are up just 40 percent and 130 percent over the same time period.
Rumors of a takeover
The takeover rumors seem to be the main driver of the CEL token price jump, especially the company Ripple Labs which reported you want to buy Celsius Network.
Reuters reported that Ripple is interested in the Celsius assets, but there is no confirmation from either company yet. Celsius has halted withdrawals from the platform since June and filed for Chapter 11 bankruptcy, which will allow them to gradually pay back what they owe.
— Tajo Crypto (@TajoCrypto) August 10, 2022
In July, there were rumors that Goldman Sachs was also looking to acquire Celsius for $2 billion.
However, these two rumors still cannot be confirmed as neither Goldman Sachs nor Ripple Labs have confirmed the truth of the rumours.
Not only that, encouraging small investors is also one of the driving factors for the CEL token price.
It is known that some have organized themselves short squeeze in order to limit the drop of the token.
For your information, short squeeze is when the price of an asset suddenly rises, forcing sellers to short buy assets at a higher price to close their positions. [st]