BlockFi, Celsius, Nexo, and more: tough times can lead to difficult measures, and this year’s bear market is showing no exception to some of these players. The current situation for central finance platforms (CeFi), which have faced significant headwinds and no signs of slowing down, is a good example.
After days of speculation and reports of exploratory deals, it has been reported that FTX, a powerful crypto exchange, is putting the finishing touches to an acquisition of BlockFi for a mere $25 million valuation. The news comes after reports emerged that FTX passed on an acquisition deal for Celsius after seeing the CeFi firm’s balance sheet.
BlockFi
Should the purchase come to fruition at the reported valuation, it’ll be a major hit for BlockFi equity holders, following a nearly $5B valuation last year in the midst of bull market movement. However, that $25M number could move drastically between today’s reports and closing time – and a successful acquisition will of course take months to close. BlockFi CEO Zac Prince described the number as “market rumors” and outright denied the number, stating in a tweet that “we aren’t being sold for $25M.”
According to a range of reports, FTX appears on the list of cryptocurrency exchanges that are looking for opportunities during the crypto market downturn. They have been exploring equity shares or buyouts in order to purchase Celsius and BlockFi stock in recent weeks. However, it is difficult to assess the likelihood and viability of BlockFi’s buyout based upon the facts.
Celsius (CEL), however, has had to fight for its withdrawal rights.Source: TradingView.com CEL-USD | Source: CEL-USD on TradingView.com
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Status Of CeFi: Pulse Review
What happened to us? Bear market downturn over the past month or two has caused major pain for CeFi platforms, in a flurry of madness that started with Celsius freezing withdrawals earlier this month amid worries of a bank run and lack of immediate liquidity within the platform’s holdings. BlockFi, which received a $250M credit line from FTX last week, has also been under the fire. Although BlockFi appears to have many options, there are not enough equity investors who will be able to afford to follow a path that does not benefit them. Nexo has largely stayed quiet during the chaos, but there’s various internet sleuths who have targeted Nexo with content campaigns around the company’s practices as well.
Regardless of how you feel about CeFi, the decline of infrastructure in this bear market shouldn’t be celebrated – we’ll see how it all shakes out when the tides recover.
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