A new wave of creditor payouts is poised to ripple through the crypto market as Celsius prepares to release $220.6M in its third distribution round—largely in BTC and ETH. With funds set to go out on August 20, 2025, traders are bracing for potential inflows to exchanges, shifting liquidity pockets, and a possible end to one of crypto’s most persistent bankruptcy overhangs.

What’s Happening

Celsius confirmed it will initiate its third distribution to eligible creditors, after returning about 93% in earlier rounds. This tranche aims to deliver remaining balances to creditors approved under the restructuring plan. Most distributions will be denominated in Bitcoin and Ethereum, with some corporate creditors paid in U.S. dollars. Creditors must complete KYC via approved platforms such as Coinbase and PayPal. Additionally, creditors are set to receive equity in the newly formed mining arm, Ionic Digital, aimed at improving total recovery rates—estimated between 67% and 85% of original holdings.

Where the $220.6M Comes From

• $63.2M from lawsuit recoveries and administrative fees
• $17M from disallowed claims tied to the former CEO and related entities
• $86.4M from disputed/contingent claims reserve
• $46.3M from forfeited claims
• $7.7M from expunged claims

Why It Matters to Traders

This is a meaningful potential supply event in BTC and ETH. While not every coin will be market-sold, historical bankruptcy distributions have coincided with short-term volatility as recipients rebalance or exit. The flip side: completing this round could reduce the lingering “forced seller” narrative—potentially a medium-term positive as the market prices out further Celsius overhang.

Flows to Watch

Expect address activity from known Celsius estate wallets and potential upticks in exchange deposits around the distribution date. Because KYC is routed through Coinbase and PayPal, some flows may go via custodial rails rather than immediate on-chain selling. Watch for OTC settlement indications that could mute spot order book impact.

Actionable Playbook

• Track wallet flows: Monitor labeled Celsius-related addresses and exchange inflows for BTC and ETH around Aug 20 and the following days.
• Prepare for volatility: Consider narrower position sizing and staggered orders to manage slippage if order books thin during spikes.
• Watch basis and funding: Dislocations between spot, futures, and perps can open short-lived basis and spread opportunities.
• Time entries/exits: If you expect sell pressure, scale into bids below key liquidity zones; if overhang clears, look for momentum confirmation on reclaim of prior support.
• Creditors: Complete KYC only via official portals and ignore unsolicited emails—Celsius warned of phishing attempts.

Risks and Caveats

Not all coins hit the market at once: some recipients may hold, some get USD, and part of recovery is in Ionic Digital equity. Prior rounds did not trigger extreme drawdowns, and OTC settlement can further dampen impact. Phishing remains a real risk—verify all communications through official channels.

Bottom Line

Celsius’s third distribution is both a short-term liquidity event and a possible medium-term de-risking for the market. Traders who track flows and manage execution risk can turn volatility into opportunity while the bankruptcy saga draws closer to a close.

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