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Hype Asset of the Day | April 14, 2022

Nexo (NEXO)

As cryptocurrency grows increasingly popular and garners the attention of more long-term investors, the need for a way to earn interest on, and spend your crypto in real-world establishments grows too. Nexo is a lending institution that facilitates exactly that! Launched in 2018, UK-based Nexo has quickly gained the attention of investors and mainstream companies worldwide, leading to Nexo serving more than 4 million users. Currently, NEXO is trading at around $2.40, just over 10% below YTD highs of $2.68. The lending institution has been making headlines recently, with mentions of Nexo up 200% over the past day. This has led many investors to wonder if Nexo is a good investment. To answer this question we’ve reviewed what people are saying about Nexo, filtering out the news from the noise to bring you only the most important and relevant information.

Is Nexo a Good Investment? - Positives

Everyone’s been talking about Nexo but is it actually a good investment? Here are a few of the main reasons why it might be worthwhile adding some Nexo to your portfolio:

  • The news on everyone’s mind is Nexo’s partnership with Mastercard. In a first-of-its-kind deal, Nexo is working with world-renowned payment provider Mastercard to launch a crypto-backed ‘credit card’. The Nexo card’s unique selling point is that it offers a real line of credit instead of simply allowing you to spend your crypto-assets. If everything goes ahead as planned, this endeavor could be exactly what Nexo needed to substantially increase its customer base.

  • It should be of little surprise that the Nexo card has been loaded full of benefits to entice users to get involved. Some of the most prominent include up to 2% cashback in the form of NEXO or BTC, no monthly fees, no minimum loan repayments, no interest (as long as your credit line stays below 20% of holdings), free ATM withdrawals, and better tax optimization (no capital gains tax on loans).

  • Nexo recently launched Nexo Ventures, a $150 million fund dedicated to investing in Web3.0-based projects. If used in conjunction with the Nexo card, Web3.0 projects could be supercharged with funding and an easy fiat-on-ramp.

  • Nexo has been working on building meaningful partnerships, recently announcing Bakkt, a regulated Bitcoin and Ethereum custodian. Furthermore, Nexo partnered with Fidelity Digital Assets in order to provide institutional investors with access to Nexo’s products and infrastructure.

  • Similar to traditional banking, many companies, Nexo included, are offering users interest on their crypto. This allows users to earn interest on their long-term holds, while also allowing platforms like Nexo to profit by providing assets to borrowers at a higher rate than lenders are paid. This model has worked wonders for banks for years, so there’s no reason why that same success can’t be transferred to the crypto space.

Is Nexo a Good Investment - Negatives

As with every investment, Nexo has its risks. To help our readers decide whether buying NEXO is right for you, we’ve broken down a couple of negatives surrounding the company.

  • New York has been cracking down heavily on crypto lending firms, with the NY Attorney General Letitia James taking aim at 5 such companies. Despite the Attorney General not releasing names to the public, Nexo has confirmed it received instruction to cease its operations in New York. Despite Nexo stating it must be a mistake as they don’t offer lending products in New York, this could certainly pose trouble for investors if the Attorney General doesn’t back down.

  • Although early crypto lending institutions have had relatively little competition in recent years, things are changing as mainstream companies realize just how much money is involved. Revolut, a fintech company worth $33 billion, has recently announced plans to release its own token with similar functionality to NEXO. Furthermore, companies like BlockFi and Celsius are gaining traction almost as quickly as Nexo, meaning it’ll likely be a race to see which platform can innovate the most and become the de-facto lending platform.

Hype Asset of the Day - Conclusion

All in all, thanks to a plethora of exciting partnerships, Nexo is looking primed for take-off. The MasterCard partnership will work wonders for legitimizing Nexo and getting crypto-skeptics on board. This could be precisely what’s needed to rapidly expand Nexo’s userbase, allowing them to better benefit from economies of scale and offer customers more attractive rates. If you’d like to hear about more trending stocks and cryptocurrencies before anyone else, we recommend checking out our premium plans. Alternatively, to learn more about the services HypeIndex offers head over to our FAQ page.

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