Crypto market wrap; Celsius Coin Keeps Falling, Acala Burns

by Arthur · August 16, 2022

Image of Coin — The Celsius coin continued to fall on Tuesday as the crypto market continued to roll with the punches. – Photo: Shutterstock

The Celsius coin continued to fall on Tuesday and the Acala network burned its extra tokens as the cryptocurrency market continued to roll with the punches.

CEL was down 16% around the time conventional markets closed in North America. (All figures based on CoinMarketCap data.) The decline followed a 23% drop on Monday. But overall, prices showed resilience in the face of the crypto winter.

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CEL to USD

Coins know volatility

CEL has become well acquainted with volatility, and has experienced sharp rises and falls since then The Celsius Network collapsedand other crypto lenders Voyager Digital and hedge fund operator Three Arrows Capital collapsed.

All three companies filed for bankruptcy protection after being hammered by the collapses of the original luna coin and related terraUSD stablecoin.

But CEL’s decline on Tuesday was an outlier compared to the rest of the market, which was up marginally.

CHZ to USD

Investors are still hungry for Chiliz

Dogecoin (DOGE), a popular meme token, was the biggest gainer as it rose a relatively modest 10%.

Chillies (CHZ) continued to appeal to investors, rising 8% after gaining 13% on Monday. But no other winners stood out, while losses were minimal.

ACA to USD

Combustion confirmed

Acala Network confirmed on Twitter that it burned approximately 1.3 billion ACA after receiving approval from the community.

Acala (ACA) was slightly down in the wake of a weekend hack. ACA’s value disintegrated when the stablecoin lost its link. Hackers took advantage of a flawed liquidity pool and minted an additional 1.3 billion tokens, which Acala Network, the coin’s backer, was able to hold within the Polkadot (DOT) blockchain. (The network operates on Polkadot.)

Analysts doubt that Acala can recover

A leading analyst doubts the ACA will recover its lost value.

“Once again it shows that the algorithmic stablecoin, in this case Acala, which is a stablecoin that is hedged against other currencies and not tied to the US dollar, is vulnerable to smart contract attacks,” said Chris Terry, deputy director. president of enterprise solutions at US-based open lender SmartFi.

“When a stablecoin is depegged like this, the chance of it coming back is very small.”

He said that tether (USDT) and USDC, both pegged on a one-to-one basis with the US dollar, are the safest stablecoins to invest in.

“Algorithmic stablecoins and multi-collateralized stablecoins tied to other cryptocurrency assets continue to have a much higher risk than most people realize,” Terry said. “When it comes to stablecoins, there is no reason to really use anything other than tether and USDC.”

Hodlnaut seeks protection from creditors

Troubled Singapore-based crypto lender Hodlnaut announced on Tuesday that it has filed for protection from creditors. The company applied to the Singapore High Court to be placed under judicial management.

Hodlnaut said the application is the best solution under the circumstances, as it tries to avoid having to liquidate customers’ crypto assets. The debt-laden lender froze transfers and swaps earlier this week due to what it described as difficult market conditions.