forecast

Celsius co-founder declares his equity is ‘worthless’ in court

It’s unclear if the court declaration by Leon will have any bearing on the value of the shares still in circulation.

A Celsius Network co-founder has moved in court to declare the entirety of his equity stake in the embattled crypto company as “worthless.”

In a Monday document to the United States Bankruptcy Court, law firm Kirkland & Ellis LLP filed a declaration on behalf of Celsius Co-Founder Daniel Leon, confirming his status as a substantial shareholder and declaring that his 32,600 common shares are now considered worthless. 

A declaration that a particular stock or common share is “worthless” generally occurs when shareholders in a company think they will not receive any further distribution for their holdings.

According to the IRS, a stock is worthless when a taxpayer can show the security had value at the end of the year preceding the deduction year and that an identifiable event caused a loss in the deduction year.

The embattled crypto lender filed for Chapter 11 bankruptcy in July, a month after halting withdrawals due to “extreme market conditions.”

BnkToTheFuture CEO Simon Dixon suggested in a Monday Twitter post that the declaration means that Celsius Network private equity shares are now “officially worthless” and that the co-founder wants to use them as a tax write-off. 

Celsius raised two rounds of private equity funds from smaller investors via BnkToTheFuture.

Meanwhile, Celsius Network’s cash runway appears to have stretched. While a filing last month forecasted the company to be out of money by October, a new forecast appears to show the company has managed to get more breathing room. 

Related: Law Decoded, Aug. 29–Sep. 5: Celsius is ready to give money back, but not much

The latest forecast, dated Aug. 31 and filed to the United States Bankruptcy Court on Tuesday. has the firm sitting on just over $111 million in cash currently, forecasting $42 million cash left by the end of November.

Bitcoin to make new all-time-highs within 24 months: Coinshares CSO

Demirors however said she certainly expects “more pain ahead” for tech stocks and crypto as we head closer to recession.

Bitcoin (BTC) may have further to fall, but CoinShares chief strategy officer Meltem Demirors believes the top cryptocurrency will reach new all-time highs within the next 24 months.

Speaking on CNBC’s Squawk Box on Monday, Demirors noted that Bitcoin has always been a “cyclical asset” with drawdowns from peak to trough at 80 to 90% historically.

With Bitcoin currently sitting at about 65% down from its all-time highs in November 2021, Demirors believes “there is still room for some downward correction.”

However, Demirors noted there has been strong support around $20,000 and that she did not expect Bitcoin to fall below $14,000. She predicted the pain would be a distant memory by 2024, saying:

“In the next 24 months, we will see new all-time highs in Bitcoin.”

Bitcoin is currently priced at $19,401, down 2% in 24 hours and down 72% from its all-time high.

A reversal may be some time off, however, given Demirors can see “no near upside catalysts” — which could signal more pain in store for weaker crypto projects.

“We obviously had a lot of liquidations, a lot of insolvencies that had a massive impact on the market. […] We’re talking about $10, $20, $30 billion of capital that has basically evaporated overnight:”

“[We] certainly expect more pain ahead for tech stocks, growth, and also crypto.”

Demiror said she expected a large number of crypto assets to be wiped out during the bear market, similar to what has been seen in tech stocks.

“There’s a very long, long tail of crypto assets that I think will go to zero, that doesn’t really have any long-term prospect as we’ve seen with so many tech stocks as well.”

Louis Schoeman, managing director at broker comparison site Forex Suggest, has a similar view. In a recent 9News report, he predicted that the current crypto downturn could kill off as much as 90 percent of all crypto projects.

“This is a cleansing process,” Schoeman said, adding that only the strongest crypto projects will survive this bear market.

“But it also serves as a massive opportunity for many no-coiners to enter the crypto market for the first time. Fortune favors the brave in crypto right now.”

Related: Despite ‘worst bear market ever,’ Bitcoin has become more resilient, Glassnode analyst says

Last month, billionaire entrepreneur Mark Cuban said he doesn’t expect the crypto bear market to be over until there’s a better focus on applications with business-focused utility.

Cuban also believes mergers between different protocols and blockchains will eventually see the crypto industry consolidate, as “that’s what happens in every industry.”