Wednesday, November 30, 2022
HomeCrypto NewsMarketOffering High Yields, Crypto Lender Celsius Token Falls In the Wake of...

Offering High Yields, Crypto Lender Celsius Token Falls In the Wake of Terra Collapse

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Celsius Just Dipped By 32% Due To Ripple Effects After Terra Collapse.

Terra’s woes appear to affect other crypto projects in the industry. Apparently, Celsius, which is the native token on the Celsius Network, has experienced a 32% price drop due to fears that it might undergo what Terra underwent a few weeks ago.

At the time of this writing, data on CoinMarketCap indicate a 32% price decrease for Celsius (CEL). The coin is currently trading at around $0.44.

Unrealistic Rewards

The fear is primarily fueled by the high rewards promised by the Celsius network, raising questions about the sustainability of the system. Celsius promises as high as 30% weekly returns on investments. While this may have contributed to investor pessimism, it’s still not clear what exactly led to the sudden price drop of the CEL token. Such price movements are often caused by sudden whale action or general market changes in the wider crypto industry.

Investors’ Appetite For High-Yielding Protocols Has Decreased

Since the Terra ecosystem collapsed in May, investors have largely avoided crypto projects promising extremely high rewards. Before its collapse, Terra was dishing out 20% ROI to those who invested in UST. These rewards are often pointed out as one of the factors that caused Terra’s downfall. This is why investors may be wary of the 30% rewards promised by Celsius.

“We Are Undoubtedly In A Crypto Winter”

However, the company (Celsius Network Ltd) was quick to note that it took measures early enough to prevent an adverse circumstance such as what befell Terra. It also noted that Celcius isn’t the only crypto being affected by the current crypto winter.

Its press statement read,

“Looking across the entire crypto sector, we are undoubtedly in a crypto winter. The price of all cryptocurrencies have clearly been affected by a general market downturn. We are squarely focused on building for the long-term.”

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Ammara Mubin is a cryptocurrency reporter and trader with vast experience in the industry. Mubin has written several news stories related to the crypto industry, including non-fungible tokens (NFTs), decentralized finance (DeFi), fundraising, mining, etc. Her major focus is covering regulatory events that are capable of shaping the entire crypto ecosystem.

Disclaimer: The content is for informational purposes only, may include the author's personal opinion, and does not necessarily reflect the opinion of TheCryptoBasic. All Financial investments, including crypto, carry significant risk, so always do your complete research before investing. Never invest money you cannot afford to lose; the author or the publication does not hold any responsibility for your financial loss or gains.

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