Nexo’s recovery shows that the crypto credit storm may have settled
The crypto bear market had been largely caused by the crash of various lending platforms. Crypto lending firms such as Voyager Digital and Celsius had quickly gone bankrupt after being unable to keep up with the market downturn. Others, like Nexo, had felt the heat of these crashes as a result of the bank runs that followed. But it seems the worst of the storm has passed as users start to trust lending platforms again.
Nexo is starting to see inflows
After the various crashes that rocked the crypto lending space, Nexo had taken a big hit in terms of deposits and withdrawals. While deposits had slowed, withdrawals had increased to the point that rumors began circulating on social media that the crypto lender would be the next to go bankrupt.
Nevertheless, Nexo had managed to weather the storm better than the market had expected. It had seen slow movements for a while after, but as the market sentiment had started to recover, Nexo saw more influx of users.
Nexo customer liabilities grows | Source: Arcane Research
On August 29, customer liabilities for Nexo were reported to be 199,170 BTC. This is a long way from the May high of 261,111 BTC, just before the market crash, but it shows significant growth from the July 21 low of 169,672 BTC.
The withdrawal pressure on the platform has also eased considerably, which is evident from the customer liability certificates. In addition, it has shown a steady rise in the month of August. A good sign for lending platforms in space.
Where is crypto lending headed?
Crypto lending platforms have suffered the most in the current market trend, but they continue to receive support as they go through one of the toughest times. One example is Holdnautm which received creditor protection from a court in Singapore about a month after another troubled exchange, Zipmex, received the same creditor protection.
Others, such as Celsius and Voyager Digital, continue to battle the bankruptcy process in New York courts. Both lending platforms have been able to provide updates to users, but not to a significant extent.
Nexo price at $1.04 | Source: NEXOUSD on TradingView.com
More encouraging is the fact that news of crypto firms going bankrupt has slowed to a crawl. So despite Nexo being the only platform to report positive changes, there may be others seeing a positive trend, especially given the recent turn in investor sentiment.
Featured image from Business 2 Community, charts from Arcane Research and TradingView.com
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