Nexo: New Loaning System?

By Daman Rao | Crescent City Capital Market Analyst Intern

What is Nexo?

Nexo was established by Antoni Trenchev, Georgi Shulev, and Kalin Metodiev in 2018. Positioned as a CeFi (Centralised Finance) platform, Nexo provides a diverse range of services, including the purchase of cryptocurrencies with fiat currencies and token swapping. Notably, it has gained prominence for its crypto-backed loan service. Nexo’s emphasis on digital asset borrowing has resulted in the issuance of over $7 billion in lines of credit to users from 2018 to 2023. The platform prioritises the security of assets by obtaining insurance through custodian partners and subjecting itself to regular audits, crucial steps given the challenges faced by other CeFi lending platforms like Celsius and BlockFi. Nexo issues the NEXO token, which operates on the Ethereum blockchain. Holders of NEXO enjoy various benefits through a multi-tiered loyalty program, including crypto rewards, discounted trading, and preferred interest rates for borrowing.

How does it work?

Nexo operates under a centralised structure, allowing the platform to align with regulations and obtain necessary registrations from governing bodies. This approach establishes a solid legal foundation for Nexo, despite the prevalent advocacy for decentralisation among crypto users. Notably, Nexo is registered as a money service business with the US Financial Crimes Enforcement Network (FinCEN), recognized as a virtual currency operator by Italy’s Organismo Agenti e Mediatori (OAM), and holds licences as a money transmitter and lender in several US states. The centralised nature of Nexo facilitates regular audits of reserves, asset insurance, and the development of industry relationships for purposes such as crypto custody.

Nexo facilitates quick and efficient loans, with funds disbursed on the same or the next day through bank transfers involving SWIFT, SEPA, or ACH. Both personal and business accounts can receive these loans. The platform’s instant crypto loans are complemented by the option to use the free Nexo card. Clients can establish an Instant Crypto Credit Line, securing cash or stablecoins by leveraging their cryptocurrency holdings as collateral. Approval for loans ranging from $50 to $2 million is granted instantly, with no origination fees or monthly repayments. Funds become available within 24 hours, and repayment can be made in over 40 fiat currencies, stablecoins (such as USDT or USDC), or a combination of crypto and fiat currencies.

Recent Updates

Nexo as of December 8th is trading at $0.8746 with a 24-hr trading volume of $5,321,285. The total circulating supply is approximately 560 million tokens. 

Looking at the screenshot above, Nexo overall is up 350% all time. It reached its all time high of $4.63 over 2 years ago. Moving over to the screenshot posted below, over the past month Nexo has managed to lead a surge of up 26% since early November. 

Over the past year Nexo has maintained its price and there has not been much activity since its price drop back in April 2022, which fell after its losing on binance on April 29, 2022. It continued to fall with the collapse in LUNA currency. Nexo made a small recovery after that and reached a high of $1.15 on August 31st, 2022 after an announcement by Nexo of a $50 million allocation to its buyback initiative. 

Looking at the image above Nexo’s RSI is hovering around 52.45, which is very neutral and is not providing much of an indicator to buy or sell. The moving average looks like a downward and bearish sentiment, suggesting that right now might be a time to sit back and watch how Nexo reacts over the short term of 2-3 weeks. 

Summary

Looking ahead, the prediction for 2025 suggested a starting value of slightly below $5.79, with the potential to reach $8.81 by the end of that year. Nexo is to be analysed and watched over the next month as the current trends do not provide much of an insight on the potential price points. It is still a good alt coin to keep an eye on with upcoming developments and updates in the field. 

Disclaimer: Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. Please conduct your own due diligence before making any investment decisions.

References:

https://www.bitstamp.net/learn/cryptocurrency-guide/what-is-nexo/

https://cryptonews.com/coins/nexo/

https://changelly.com/blog/what-is-nexo-token/