Could Bitcoin and Ether Prices Double Lead to Repayment of All Claims?

Celsius Could Repay All Claims with BTC and ETH Price Appreciation

The Bank of the Future has estimated that crypto lender Celsius, which is currently undergoing Chapter 11 bankruptcy, could possibly repay all claims if the prices of Bitcoin (BTC) and Ether (ETH) — two assets held by the firm — were to double their current market prices. Simon Dixon, founder of the crypto-focused investment firm, tweeted his estimates based on the final deal with the Fahrenheit consortium, which won the bid to acquire Celsius’ assets in May.

According to Dixon, if BTC hits $54,879 and ETH reaches $3,750, then Celsius could repay all claims from the appreciation of these two assets. In order to maximize the value of its assets, Celsius appealed to the court in June to convert all its altcoins into BTC and ETH.

The Bank of the Future’s internal investment banking team, with no access to privileged information, estimated these figures. The restructuring plan under Fahrenheit includes mining, institutional loans, investments worth roughly $1.4 billion and $450 million in liquid crypto.

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Fahrenheit’s recovery plans have been compared to the Blockchain Recovery Investment Consortium (BRIC) — a holding company affiliated with the Winklevoss-owned Gemini Trust — wind-down plans. The total recovery under the orderly wind-down comes to $3.519 billion, which exceeds the total assets available at $3.417 billion. This difference is accounted for by the variable cost. The return to retail borrowers is estimated to be around $339 million. Bank of the Future estimates suggests the recovery is about 65% for both options, which could increase to about 75%, assuming 10% of claims are unclaimed. 41.4% of recovery under the Fahrenheit plan is in equity, with the remaining 58.6% in liquid crypto. On the other hand, only 12.4% of recovery under BRIC orderly wind down is in equity, with the remaining 87.6% in liquid crypto.

Dixon said creditors should fight to get out of the bankruptcy proceedings before the end of 2023, or before the price of BTC and ETH hit the estimated mark. He also added that to avoid “another rug pull, we will need to fight hard against it if it comes up.“

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