The Nexo lender is facing declining deposits with data from the Wayback Machine showing how much the deposits declined in the past few months so let’s read more today in our latest Nexo news.
The Nexo lender is facing drop in deposits and it positioned itself as a potential acquirer of ailing crypto companies. The data posted on the websites of the accounting company contracted by Nexo to provide regular attestations on customer balances shows that the lender could have suffered from withdrawals similar to the ones that led to troubles at rivals.
The company’s liabilities the value of digital assets users deposited on the paltform as they declined to $3.9 billion down from $6.9 billion on May 12 based on the real-time attestations that are provided by Armanino LLP. The data shows that the Wayback Machine proves Nexo is a private company so its financial statements are not publicly available. The drop in the customer liabilities works out to a 44% decrease and during that time, Bitcoin’s price dropped by 20% and the ETH price as the second biggest cryptocurrency was down 22% so market factors could account for some of the drops.
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Customer liabilities expressed in BTC terms help filter out the fluctuation in crypto prices and dropped to 169,672 BTC from 261,111 BTC marking a 35% drop over the same period. Vetle Lunde as an analyst from Arcane Research conducted his own assessment and added:
“It’s very natural behavior, given the state of the market. Nexo users are cautious given the shaky market conditions and the bankruptcies affiliated with other big retail-oriented crypto lending platforms.”
Another Nexo spokesperson added that the outflows from the platform are proportional to the volatility in the space and are considered normal for such a bumpy time in the crypto market:
“They are nothing Nexo hasn’t seen before during previous periods of volatility like the 2020 COVID panic.”
This year’s crypto crash rattled the nerves of retail depositors while saddling the big industry players with losses on assets that they lend out in search of yields. Celsius Netowrk as a crypto lender as well as Voyager each froze withdrawals and later declared bankruptcy later we also saw BlockFi receive a credit lifeline from FTX which gained an option to acquire the company at a discount. Nexo avoided such drastic moves and appears to have sidestepped some of the worst collapses.
The paltform managed to avoid headlines in the multibillion-dollar crash of the Terra blockchain and steered clear of the collapse of Three Arrows Capital. The Nexo spokesperson also added:
“As you may have read from Three Arrows Capital’s reveal, Nexo’s name was not among those exposed.”
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