Crypto lending is fast becoming a trend in the crypto space with diverse platforms taking off in 2020. With already over $8 billion in value, the crypto lending market is expected to experience continual and somewhat steady growth.
The idea is to replace greedy intermediaries while also ensuring that users substantially earn passive income per week on their crypto holdings, especially in comparison to interest rates of fiat-based savings scheme. This birthed the slogan “Banking is an essential need of the world, but banks in itself are not needed.”
According to expert, crypto loans and Bitcoin are championing the surge towards the massive adoption of cryptos due to the simplicity of investment. Several crypto start-ups such as Celsius are spearheading novel monetary policies in the digital asset space, with over $8.2 billion in processed loans.
Celsius Network (CEL) – A Quick Overview
Celsius is a democratized cryptocurrency savings platform that operates on the blockchain and offers lending and borrowing services “just like the big banks do with traditional assets,” but in a more structured manner, without holding on to all of the generated profits. The entirety of the Celsius network is based on its CEL token, which can be used to take loans, send money P2P, get interests or even HODL if you like.
The Celsius network supports a wide range of cryptos, including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and other altcoins like Dash (DASH), Bitcoin Gold (BTG), EOS and Zcash (ZEC). In February 2020, the company began offering its liquidity providers compounding interest on cryptos deposited in its digital wallet.
Despite the instability and economic uncertainty induced by the COVID-19 pandemic, Alex Masinsky, the network’s CEO, has said that the use case of the digital asset has experienced massive growth and has continued so.
Celsius Performance Spurred by Decentralized Finance Protocols
Since the introduction of the Celsius token – CEL – in 2018, the crypto has experienced substantial soar in price and has leveraged on decentralized finance (DeFi) protocols to expand its userbase, most notably in the past few months in 2020.
The ripple effect of the DeFi integration has now seen CEL shoot more than 9 times its price in January 2020 and has continued on this path with a surge of over 1700% since the crypto market flash crash in March.
Currently, CEL is valued at over $1.35 per unit and hold its place among the top 50 crypto assets ranking 42 with a market cap of over $330 million, which is a 227% increase from what was recorded at the start of September 2020 (just over $100 million).
Bitcoin Performance in 2020 So Far..
The crypto flash crash of 2020Q1 spared no digital asset, not even Bitcoin (BTC). During the start of the year, Bitcoin took off at about $7,200, with a market cap of over $130 billion.
By the end of March, the market value of the world’s top-ranking digital asset had dropped to about $6,400 and a market cap of about $117.8 billion. The 11% drop in price and about 9.4% drop in market cap is attributable to the Coronavirus pandemic.
At the moment, BTC is valued at over $13,500 per unit, with a market cap of over $250 billion, and hold its place as world’s no. 1 crypto asset. Doing the mathematics, this leaves BTC at about 1.9x its price at the start of the year, and a surge of over 110% since the flash crash of March 2020. At the start of September 2020, BTC was valued at over $11,600, when juxtaposed with its current price, that’s about a 16% increase in market price.
What Is Driving the Performance of the Celsius Network?
The impressive growth experienced by the Celsius Network in the past few months of 2020 is attributable to the company’s policies and product offerings. Unlike banks which offer meagre interest rates to its users, Celsius distributes 80% of its rake-ins.
Another important performance driver is the security architecture adopted by the company regarding its wallet. Celsius wallet is provided by PrimeTrust and FireBlocks, both with a crypto-insurance scheme that covers insider theft, external hacking and loss of private keys.
Who wouldn’t large interest rates and a multi-secured crypto lending platform, even in the middle of a pandemic! Thus far, it is reflected in the magic of DeFi
Although it is common knowledge that BTC is the world’s most accepted and recognized crypto asset, but it has been outclassed in terms of performance by several other assets such as the Celsius (CEL) Network. Based on the prices and market cap changes observed within the period of comparison, Celsius has clearly outperformed BTC by over 1000% in previous months, which is a remarkable achievement.