It’s at this point during an obvious bear market that the quote from Samuel Taylor Coleridge's The Rime of The Ancient Mariner applies most: “Water, water, everywhere, and all the boards did shrink; Water, water everywhere, Nor any drop to drink.” and not necessarily in the way you think. It isn’t because the water represents money that everyone cannot grasp, in this case, it refers to the complete crash of Celsius, the fear this market has instilled in crypto, and in truth the overall market on a whole.
Well, at Coinchange, we’re here to tell you to HODL or buy more with Coinchange, which we believe is your best bet. As this post is being written, the price of BTC has sunk to $23,373.20, levels which have not been seen since roughly Christmas of 2020. Historically though, when you look at the overall market trends, all this is part of the natural market cycle, and since history tends to repeat, which it will again if you follow the financial cycle, then those who keep their money in place, and hold funds with companies like Coinchange, will come out far more ahead than anyone who sells now that prices have plummeted. What Celsius is doing is not what people entrusted them to do, they are acting in a way to protect themselves sure, but it isn't in their or their customers' best interests by restricting access to funds to help bolster their own company.
The issue Celsius is likely facing at the moment is a liquidity mismatch, meaning that it has obligations to meet on same-day withdrawals and the assets needed to meet this obligation are rather illiquid. This leads to insolvency, which can be of two types: balance sheet insolvency or cash-flow insolvency. In the former, the company itself has way more liabilities than its assets, and will never be able to meet its obligations even if it waits or disables withdrawals. The latter is only an issue of timing, meaning that the company is able to meet its obligations but at this very moment in time it does not have the ability to do so, hence the need to disable withdrawals, which in this case is the liability.
Celsius’s mandate to halt all financial transactions not only indicates bad news for the company, but they are effectively destroying all users’ confidence in the market. Coinchange isn’t like that, at all. While yes, we understand that we cannot directly affect the market price of BTC, ETH, or any stablecoin, the algorithms we have in place will continue earning you positive returns no matter the value of the coins so that when the market rebounds, and it will, it always does, you will end up earning a lot more on the price jump when the Bull overtakes the Bear in this down-trending market.
From a security perspective, we will never hold our users' money hostage in order for us to stay afloat. Our entire platform doesn’t function on strictly the landed price of the coins we or our customers invest in. Our extensively studied, researched, and meticulously trained algorithms have been put together so that no matter what the market is currently doing, all of our users will always be earning positive returns on their investments. One thing to take note of is that CeFi and CeDeFi are different, in our case at Coinchange our strategies rely on underlying utilization of DeFi protocols, compared to Celsius which involves counterparties and loan books with under collateralization for institutions. Coinchange’s business model relies on DeFi growth, as long as there will be users willing to take part and transact we’ll be able to generate DeFi revenue and distribute it to all our clients.
At Coinchange, all our users earn positive returns with their yield. Celsius is clearly suffering the effects of the bear market as can be seen by their recent financial freeze, and from a personal perspective, would most likely have me, and many other financial investors, finding a better place to house our money and cryptocurrency so that even if the value of the coins drop, we’ll still be earning at least something back on the crypto.
To continue on my previous point about HODL’ing, investing all your money in one location goes against the entire concept of diversification and securing your funds long term. When you have all your money in only one area and situations like this occur, you're at a much greater risk of losing everything compared to if you had diversified your holdings across various different networks. For more information on how to do this, reach out to us at Coinchange, a life raft for you to actively earn returns on all the crypto traded on our platform, and we’ve got the water you can drink. Check it out for yourself and join right here!