Celsius’ Positions are Now Healthier, Three Arrows Capital Was a 'Victim of Contagion' - Nansen
Troubled crypto lender Celsius(CEL) has managed to improve the health ratio of its on-chain positions since pausing withdrawals, according to blockchain analytics platform Nansen. Meanwhile, they said, the crypto hedge fund Three Arrows Capital (3AC) was the victim of the contagion.
Celsius paused withdrawals, swaps, and transfers between accounts on June 12 citing "extreme" market conditions. Subsequently, the crypto lender started topping up collateral and repaying loans in order to maintain a healthy loan-to-value (LTV) ratio.
During the period between June 8 to June 17, Celsius was constantly transferring funds between different wallets, as well as depositing large amounts of staked ethereum (stETH) to crypto exchange FTX, presumably signaling an over-the-counter (OTC) deal, data compiled by Nansen shows.
All of these have enabled the crypto lender to exchange their illiquid stETH for more liquid assets while protecting leveraged assets by paying down debt, thus improving the health ratio of its on-chain positions.
"For now, their health ratio is still decent in the context of things, as long as there isn’t a sudden downward swing of >30% in prices of their collateral," Nansen said in a report shared with Cryptonews.com.
More specifically, Celsius’ LTV ratio stands at 1.56 on Aave (AAVE), meaning that prices need to drop more than 36% for the crypto lender to be in trouble. Likewise, on Compound (COMP), the ratio is at 1.39, which suggests prices need to drop more than 28% for Celsius to get liquidated.
"Pausing withdrawals probably helped to prevent a bank run while providing Celsius time to recalibrate and manage the risks in their investments," the report said.
The report also revealed that 3AC was likely a "victim" of
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