Celsius (CEL) Craters 63% Today, Freezing All Withdrawals

In an effort to avoid a repeat fund run that crashed Terra (LUNA) and TerraUSD (UST) just weeks ago, Celsius freezes all withdrawals or trades of funds on deposit.

Investors in the Celsius crypto fintech platform, and holders of its CEL digital asset, woke up to an announcement from developers today saying that users could not withdraw, trade, or access their funds indefinitely.

It's reported that 1.7 million account holders received an email version of the official statement posted to the Celsius blog website, which called the unprecedented action "necessary" and blamed broader macroeconomic forces.

"Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, swap, and transfers between accounts. We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations," the statement reads. "We believe that our decision to pause withdrawals, swap, and transfers between accounts is the most responsible action we can take to protect our community. We are working with a singular focus: to protect and preserve assets to meet our obligations to customers."

The message went on to state that the group is exploring a variety of ways to try and quickly restore account access to CEL holders who can only passively watch the asset's value bounce around without any ability to take any action.

Celsius drops more than 60% over the past day

As Celsius investors and CEL holders stand helplessly on the sidelines, the CEL token, which runs on the Ethereum blockchain, has plummeted 63% over the past 24 hours according to CoinMarketCap. It was trading as low as $0.1802 per token across cryptocurrency exchanges, falling from a high of $0.4982 during the past day.

Media and social media reports assert that Friday's higher-than-expected inflation for May triggered a double-digit slide across the entire cryptocurrency sector, negatively impacting the most valuable crypto projects, including Ethereum and Bitcoin. The spiraling pricing action seems to have kickstarted the funding flight from Celsius, which offers higher than average yields to investors, but appears to lack the funds to cover all deposits if they were to be withdrawn all at once.

Is Celsius a buy?

According to CoinMarketCap, CEL hit its all-time high of $8.02 last June and is currently priced at a 97% discount from that peak. Every investor should know how much they can comfortably risk to invest, do their own research, and only seek financial advice from certified specialists. But in my opinion, there's just too much uncertainty for anyone to invest in CEL right now, despite its ultra-low price point.