Celsius to Unstake Thousands of Ether As Part of its Reorganization Plan

News has just hit the crypto market that Ether’s prices may rise in the coming week after Celsius said it will unstake its holdings of the cryptocurrency.

Celsius, who is a crypto lender, recently announced that it will restructure in bankruptcy proceedings sees this move as removing a factor that may have been crucial to Ether’s underperformance recently.

As such, Celsius sent more than 30,000 ETH to custodian Fireblocks in the last 7 days. Some of those 30,000 ETH were instantly deposited on Coinbase.

What is Staking?

If you are active in the crypto world, you have surely heard of the term “Staking”. It represents a way in which cryptocurrencies verify their transactions and a way that allows crypto holders to earn rewards on their holdings.

So, staking cryptocurrencies means that you will need to commit your crypto assets to support the blockchain network and confirm the transactions. In return for staking, users get more cryptocurrency, it is as simple as that.

Cryptocurrencies that use proof-of-stake model to process payments, such as Ether, are available for staking.

A Shift To Bitcoin Mining

Celsius was one of many crypto lenders to file for bankruptcy following the immediate growth of the entire industry during the pandemic years. Therefore, it has recently announced its intentions to shift into a new entity that will solely deal with Bitcoin mining.

As you can imagine, this change is a big departure from Celsius’ initial reorganization strategy that put its focus on staking.

At the moment, Celsius registers shares for a Bitcoin mining company called Mining NewCo. Celsius’ customers will be the owners of that company.

Covering Costs for the Reorganization

Even though Celsius converted to become a Bitcoin miner and had previously stated that it would include staking in its activities, it has recently been selling staking rewards on the open market. Celsius had to do that to cover the costs connected with the reorganization plan.

An X post by the company recently confirmed this by saying that Celsius will unstake all ETH holdings which were giving valuable staking rewards income to the state. According to the firm, this big unstaking activity will free Ether and guarantee a timely distribution towards creditors.

Reliable data from Arkham has shown that crypto wallets connected to Celsius have staked incredible amounts – more than $151 million worth of Ether. Judging by the sum, it is likely that it earns just over 5% in annual yields.

Even though the staking rewards may not be the catalyst for big sales of Ether, some have argued that they have contributed negatively to the token. Investors don’t have big sentiments for Ether, but we cannot neglect the interest in other blockchains as another factor for the negative perception.

In the meantime, Celsius sent more than 30,000 ETH to Fireblocks, which were later deposited to Coinbase – a crypto exchange platform. From there on, we suppose that traders were quick to exchange them for stablecoins.