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Celsius increases 6000% despite the setbacks of its CEO

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The Celsius (CEL) token has seen its price increase by 6000% in just two months, from $0.07 in June to $4.65 on Monday according to data from Tradingview. The value of the CEL token is therefore positively impacted by the bankruptcy of the cryptocurrency lending company. Even so, the cryptocurrency’s price is currently falling in price, and was worth $2.7 as of 10:30 a.m. Tuesday morning.

A “short squeeze” phenomenon

The price of the company’s token has returned to the level it was at just before user funds were frozen. This happened in difficult market conditions, due to the company’s liquidity problems. The shares of bankrupt companies in the traditional financial sector are also experiencing this phenomenon.

On June 12, the Celsius platform suspended customer withdrawals and transfers. However, transactions of its token have never been interrupted. There is a game of speculation that causes effects like this in an unregulated market like the cryptocurrency market.

When they heard about the fund’s problems (low liquidity, probable bankruptcy), they decided to take this position: many investors positioned themselves to take advantage of a potential loss in value of the token by opening option trades or by selling the token short.

However, since mid-June the price of a token of the token has been steadily increasing. When certain options activate liquidation thresholds, investors who have positioned their position are forced to buy back their position at any price, for margin call reasons. This is a traditional financial process that also applies to financial assets.

Over the past two months, the cryptocurrency has grown over 6000%. It is possible that the currency will reach a ceiling in the near future. Moreover, Celsius hopes to be able to resell the assets at a good price, including the technology and infrastructure, as well as the tokens which have again gained a lot of value.

Celsius filed for bankruptcy and lost $1,200 million in reserves according to data it provided itself. Although Ripple and Goldman Sachs are closely monitoring Celsius’ assets, investing in a token like this is very risky as the company is not yet out of business.

The CEO of Celsius would have taken control of trading instead of the investment cell

The Celsius token has skyrocketed 6,000% in the past two months. But according to close sources quoted by the Financial Times, Alex Mashinky, the CEO of Celsius himself would have taken care of the trading of the crypto lending platform which would have caused huge losses.

The CEO had announced last January to the investment cell team that he was taking control of the trading strategy. A revelation that seems impossible, but that could say more about Celsius’ internal problems.

This is called a function overflow. Mashinsky allegedly carried out transactions without the approval of his key financial directors and senior executives. He took control of several transactions, selling bitcoins for losses of around $50 million, despite the fact that strategies had already been put in place.

While it’s hard to say how much of Celsius’ losses this month were related to the CEO, Mashinsky made some highly suspicious personal transactions. Additionally, the company froze user funds and went bankrupt, which does not bode well for Celsius and its future. Although the scandal is coming to an end, there are still risks that more information will be released in the coming weeks.

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