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Nexo: A Risk Analysis And A Customer's Review

Mar. 03, 2021 11:02 AM ETNEXO USD (NEXO-USD)BTC-USD, XRP-USD12 Comments
Keyanoush Razavidinani profile picture
Keyanoush Razavidinani


  • Nexo's Concept: Hodlers of crypto assets can continue holding their crypto and take a loan with their crypto as collateral, thus enjoying further price appreciation.
  • Nexo's differentiation factor is their own Nexo Token, which creates a real utility to buy and hold it.
  • There are various risks related to crypto-credit-lines as we've seen in March 2020.


A few months back, a friend of mine told me about Nexo (NEXO-USD), and I became very curious. Receiving 6-12% interest, depending on what kind of currency you're storing within Nexo, sounds really good. There are similar offerings on the market like BlockFi. What's the big difference?

Nexo has its own token. It's an important differentiation factor towards other credit-lending services. Nexo very cleverly creates a utility for its Token on its platform to create value for the customer.

First, let's dive deeper into what Nexo is. If you already know what Nexo's products and services are, feel free to jump to the section "The Big Deal - The Nexo Token."

Nexo Concept

Source: Intotheblock.com

Around 60% of Bitcoin (BTC-USD) wallets are long-time hodlers that keep their coins for 1+ years. Another 25% hodl their bitcoins anywhere between one and 12 months. Nexo and BlockFi target these groups and offer them a way to use their asset without forgoing the price appreciation.

Bitcoin and other crypto hodlers, miners, hedge funds, crypto companies, and cryptocurrency exchanges are just part of the customer segment that Nexo is targeting. Another are the owners of Tokenized Assets who need liquidity and can provide their asset as collateral with Nexo.

This whole concept is not new. Pawnshops have been offering this kind of service for years. The difference is that Nexo's assets as collateral are much more liquid and prone to price fluctuations.

Nexo's product line

Savings Account with Interest

The main incentive to keep your crypto-holdings with Nexo is to enjoy the appreciation of your crypto-assets and receive interest on your holdings anywhere between 6-12%.

Retail Credit-Line

By having crypto in the account as collateral, they offer loans up to 50% of the user's assets' current market value (Loan-to-Value - LTV of 50%.) They manage default risk with

This article was written by

Keyanoush Razavidinani profile picture
Engineer turned value investor and researcher. Worked as an engineer in the semiconductor industry in the field of design and characterization. Fell in love with business analysis and stock analysis in 2016 and became an eternal student.  I focus on long-term and income-generating investments. Occasionally, I use options to hedge or start positions.

Analyst’s Disclosure: I am/we are long BIT-USD, NEXO-USD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I have no formal training in investing. All articles are my personal perspective on a given prospective investment and should not be considered as investment advice. Due diligence should be exercised and readers should engage in additional research and analysis before making their own investment decision. All relevant risks are not covered in this article. Readers should consider their own unique investment profile and consider seeking advice from an investment professional before making an investment decision.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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