Fahrenheit, a leading provider of institutional-grade cryptocurrency custody and trading solutions, announced on August 3, 2021, that it has won the bid to acquire the assets of Celsius, a financially distressed cryptocurrency lender. This acquisition marks a significant move for Fahrenheit in solidifying its position as a leading player in the global cryptocurrency industry.
Fahrenheit’s purchase of Celsius’ assets includes the following: intellectual property, technology, equipment, and customer data. The deal is valued at an estimated $120 million, and Celsius’ customers will be transferred to Fahrenheit’s custody and will continue to have access to their accounts through the Fahrenheit platform. The transaction has yet to receive regulatory approval, which may take several months to finalize.
Celsius was one of the early players in the cryptocurrency lending industry, offering its customers interest-bearing accounts and loans backed by Bitcoin and other cryptocurrencies. However, the company started experiencing financial difficulties, leading to a series of lawsuits and court battles.
The acquisition of Celsius’ assets by Fahrenheit is expected to increase the latter’s capabilities in the lending and borrowing space. Fahrenheit is expected to integrate Celsius’ technology and intellectual property into its platform to enhance its lending and borrowing products. This strategic move puts Fahrenheit in a better position to compete with other established players in the cryptocurrency custody and trading industry, such as Coinbase and Gemini.
The acquisition is also expected to strengthen Fahrenheit’s position in the cryptocurrency custody space. Celsius’ technology and intellectual property will enable Fahrenheit to develop a more robust and secure cryptocurrency custody solution, leveraging its existing institutional-grade security infrastructure.
Fahrenheit’s CEO, Daniel Weinberg, expressed his excitement about the acquisition, stating, “We’re thrilled to acquire the assets of Celsius, a pioneer in the cryptocurrency lending industry. This acquisition is an exciting step forward for us as we continue to grow and expand our suite of institutional-grade cryptocurrency solutions. We look forward to integrating Celsius’ technology and intellectual property into our platform and enhancing our lending and borrowing capabilities.”
The acquisition of Celsius’ assets by Fahrenheit comes at a time when the cryptocurrency industry is experiencing tremendous growth. Bitcoin, the leading cryptocurrency, has soared in value from around $10,000 at the beginning of 2021 to over $50,000 in August 2021. The rise in Bitcoin’s value has stimulated increased investment in the cryptocurrency industry, with more institutional investors entering the market.
Fahrenheit’s acquisition of Celsius’ assets is a sign of the growing consolidation in the cryptocurrency industry. As the industry matures, smaller players with financial difficulties are being absorbed by larger players with stronger financial positions. This consolidation is expected to continue as the cryptocurrency industry grows and matures further.
Another benefit of Fahrenheit’s acquisition of Celsius’ assets is the increased customer base. Celsius had a large customer base, mainly consisting of retail investors interested in earning interest on their cryptocurrency holdings. The acquisition will allow Fahrenheit to tap into this customer base and offer them its institutional-grade services.
In conclusion, Fahrenheit’s acquisition of Celsius’ assets is a significant move for the company in solidifying its position as a leading player in the cryptocurrency industry. The acquisition allows Fahrenheit to expand its lending and borrowing capabilities, strengthen its institutional-grade cryptocurrency custody solution, and tap into a larger customer base. The acquisition also underscores the growing consolidation in the cryptocurrency industry and the need for stronger players to absorb smaller, financially distressed players. With the acquisition still to receive regulatory approval, it is expected to be finalized in the coming months, and we should expect to see more consolidation moves in the cryptocurrency industry as it grows and matures further.
Fahrenheit, a consortium of buyers that includes venture capital firm Arrington Capital and miner US Bitcoin Corp, has won the bid to acquire Celsius Network, an insolvent lender. The lender’s assets were previously valued at around $2bn. Fahrenheit will acquire Celsius’s institutional loan portfolio, staked cryptocurrencies, mining unit, and additional alternative investments. The group must pay a deposit of $10m within three days to cement the deal, court filings show.
The Blockchain Recovery Investment Consortium, which includes Van Eck Absolute Return Advisers Corporation and GXD Labs LLC, was selected as backup, with rival bidder NovaWulf losing out. The new company will get between $450m and $500m in liquid cryptocurrency. US Bitcoin Corp will construct a range of crypto mining facilities, including a new 100-megawatt plant.
The bid, though accepted by Celsius and a committee of its creditors, must still be approved by regulators to finalize the acquisition. Bankruptcy Court Judge Martin Glenn warned months ago that “regulatory roadblocks” could plague the sale of Celsius much like it thwarted a fellow lender’s acquisition. In April, crypto exchange Binance.US terminated its purchase of bankrupt crypto lender Voyager’s $1bn in assets abruptly after federal officials appealed the sale, citing the “hostile and uncertain regulatory climate” in the US.
Celsius filed for bankruptcy last July after cratering crypto prices triggered a bank-run style rush of withdrawals that exposed the platform’s profound liquidity issues. The exchange’s implosion was a harbinger of things to come for the crypto industry, which later saw the collapse of several other high profile crypto exchanges, lenders, and venture capital firms that plunged the industry into a deep winter.
The acquisition of Celsius by Fahrenheit comes at a time when the cryptocurrency market is booming. Major cryptocurrencies like Bitcoin and Ethereum have witnessed a surge in their prices in recent months. As cryptocurrencies gain mainstream acceptance, the demand for crypto lenders, exchanges, and miners is only likely to increase. The acquisition of Celsius by Fahrenheit is a sign of this growing demand.
