- Celsius Networks surprised the market by burning a significant portion of its CEL holdings, amounting to 652.2 million tokens, representing 94% of the previous supply.
- The token burn event sparked a marginal price increase for CEL, with its value rising from 13.0 to 14.13 cents shortly after the transaction.
In a surprising move on Tuesday, April 30, Celsius Networks burned a huge majority of its CEL holdings, representing a huge majority of the CEL token supply. As per the data from Etherscan, the company has burned a total of 652.2 million CEL tokens by sending them to a null address.
Interestingly, this burned amount represents a massive 94% of the previous token supply for CEL, amounting to 692.8 million CEL, and valued at $83.2 million as of the current market price. Post this burn event, the total supply of CEL currently remains at 40.6 million.
Crypto analytics firm Arkham Analytics stated that the transaction originated from a wallet controlled by Celsius Networks. Furthermore, the Arkham Intelligence data also identified that the sending address belonged to Celsius.
The transaction has ramifications for CEL’s market valuation. Token burns diminish the supply, potentially leading to a price surge if demand persists.
Recent market statistics indicate a marginal price uptick. Following the burn transaction, CEL’s value increased from 13.0 to 14.13 cents, marking a 10% rise within the surrounding hours.
However, the day’s overall change is less pronounced, as both CEL and the cryptocurrency market have encountered more substantial losses. The entire crypto market has declined by 4.4% over a 24-hour period, with CEL’s price experiencing a comparatively larger drop of 5.3% during the same timeframe.
Bankruptcy Proceedings Plan to Burn CEL Tokens
In September 2023, Celsius filed a statement in its bankruptcy proceedings, indicating its intention to carry out a token burn for all CEL tokens held on the effective date of the reorganization plan.
Celsius clarified that it could only execute the burn for tokens within its possession, emphasizing its inability to “cancel” all CEL tokens or halt trading on exchanges.
In the broader context, Celsius referenced the potential token burn to support its argument that assigning value to the CEL token was necessary irrespective of its actions regarding token holdings. It advocated for a valuation of $0.25 per token. In January, Celsius unveiled plans to distribute $3 billion in cryptocurrency to creditors. However, the company’s public announcement on the effective date did not explicitly mention a token burn.
At the start of this year, Celsius disclosed its bankruptcy exit and rollout of plans to dispense $3 billion in crypto and fiat to creditors through a press release on January 31. Additionally, it unveiled Ionic Digital, a Bitcoin mining venture aimed at enhancing creditor benefits by bolstering recovery endeavors, per the Crypto News Flash report.
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