The head of Nexo compared the crisis in the crypto market with the banking panic of 1907

The head of Nexo compared the crisis in the crypto market with the banking panic of 1907

Nexo chief compares crypto market crisis to 1907 banking panic

Anthony Trenchev, co-founder and CEO of the Nexo landing platform, compared the current cryptocurrency market crash to the 1907 banking panic. In a conversation with Bloomberg, he noted that more successful players are forced to come to the aid of colleagues in an attempt to prevent the collapse of the industry.

“Frankly, it reminds me of the Panic of 1907 when JP Morgan was forced to step in with their own funds and then pool all the solvent guys to fix the situation. This happened before the emergence of the Fed, so there was no lender of last resort,” Trenchev said.

According to him, a similar situation has developed on the market now. The head of Nexo emphasized that the company is committed to being part of a solution that will lead to the consolidation of the cryptocurrency industry. 

He said that the platform was approached by three “household” Wall Street banks that want to “use their experience working with solvent clients to remedy the situation”. In his opinion, the industry is moving towards M & A-deals and consolidation.

Earlier, Nexo announced its readiness to buy out the loan portfolio from its competitor, Celsius. The offer is valid until June 20.

On June 13, 2022, the latter suspended withdrawals and operations on the platform “due to extreme market conditions.” According to experts, the real reason for what happened is a “liquidity crisis”, due to which the company cannot make payments to customers.

What happened to Celsius (CEL)?

Some called Celsius's bankruptcy all but inevitable, and five US state Securities Commissions began to look into the company as a “priority matter.” 

Nexo also partnered with Three Arrows Capital (3AC) to develop a loan product for based on the NFT, but it was never launched. Trenchev noted that after that, the hedge fund approached the platform with a request to issue an unsecured loan, but was refused. 

In his opinion, the companies that issued 3AC unsecured loans should be concerned. However, he believes that the market will not see a “chain reaction” as the worst is over.

“I think the things that happened to them are pretty much already priced in and the selling pressure we saw on Monday and Tuesday” , he explained.

Recall that in April Trenchev predicted the growth of bitcoin to $100,000 during 2022.

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