On BTC at $100K, Nexo’s Self-Sustainability and Plans, CBDCs and More

Bloomberg hosts Matt Miller and Yousef Gamal El-Din welcomed our Co-founder and Managing Partner Antoni Trenchev to discuss Coinbase’s big market debut, ESG issues surrounding blockchain-powered businesses, Nexo’s plans, and Antoni’s latest BTC predictions.

Short Summary

• Bitcoin piercing $60K clears the way for BTC at $75K and even $100K in the next 12 -18 months.
• Nexo’s products have allowed us to grow exponentially without external funding, so a Coinbase-style listing for Nexo would come later on, hopefully with a higher valuation.
• Nexo already has some traits of a public company via the NEXO Token, which entitles holders to dividends and will soon enable them to participate in big company decisions.
• The Department of Treasury allowing US banks to hold BTC in their custody is a very strong sign that crypto is here to stay.
• CBDCs and crypto are like the US dollar and gold: The former will bring existing currencies to the digital environment, but crypto, specifically Bitcoin, is the fundamentally scarce asset the economy consistently needs – like gold 2.0.
• Establishing solid anti-money laundering policies and addressing energy consumption issues will be the next challenges for the future of crypto.

Watch InterviewWith crypto on a roll and headed towards new milestones, it’s sure to be an interesting few months ahead. Stay tuned for more news from Nexo as we continue to gain traction in the world of global finance.

Transcript

Matt Miller (00:02):

Joining us to talk about all this is Antoni Trenchev Co-founder and Managing Partner of London-based crypto lender Nexo. He correctly called, I guess it's got to be over a year ago…And just, at the beginning of 2020, you said it [Bitcoin] would hit $50,000 by the end of the year. Now we're trading at $64,000. How high do you think Bitcoin could go? Can you give us another forecast for say 2021 or 2022?

Antoni Trenchev (00:29):

Now that we have pierced through $60,000, I think we've cleared the way to $75,000. My prediction would be that in the next 12 to 18 months, we're going to hit $100,000 per Bitcoin – not as quickly as what we saw in terms of rallies last year because everybody is now in on the trade and usually that's not such a smooth ride, but now that we've pierced through $60,000 the air has been cleared.

Matt Miller (01:01):

I wonder what you think about the hundred-billion-dollar valuation of Coinbase. Must make you consider raising more money for your business. I mean, you've been so successful with Nexo. You started a lot of services early, far before other providers did. What kind of interest are you getting?

Antoni Trenchev (01:28):

A lot of traction recently, specifically from the United States, which interestingly, coincided with the distribution of the latest round of "free money." But at Nexo we have been very proud to have a self-sustainable business, meaning that our Earn product, which gives you the means to earn interest on your idle assets, and the crypto-backed loans have honed something close to what Coinbase is getting.

Yousef Gamal El-Din (01:53): Antoni, I wonder with US office priorities, what the administration stance is going to be towards Bitcoin. What is your read and what have you been hearing?

Antoni Trenchev (02:07):

Well, I tend to focus on the longer stream of events and we got a very positive sign from the Department of Treasury when they allowed, last year, US banks to hold Bitcoin in custody. You know, PayPal coming in, a lot of the other guys, which show us these are not rebel companies. These are companies that compliantly operate wherever they are. Now with the Biden administration, I think crypto is here to stay. There's no question about that. Obviously, anti-money-laundering policies have to be in place akin to what we see in the banking sector. And we have to see the energy consumption, which is not a standalone problem for Bitcoin, that it consumes a lot of energy, but it's a question of how energy gets produced for any sector, really. And I think these are going to be the challenges, but whatever happens is going to be just a bump on the road, in the longer term perspective, crypto is here to stay and we're still early days.

Yousef Gamal El-Din (03:05):

I mean the ECB and the PBOC, they're working on their own digital currencies. To what extent is that a threat for the remainder of crypto, that sort of mainstream comes up with their own form of crypto?

Antoni Trenchev (03:17):

Well, it will be like you have the US dollar and you have gold, you know, they're very different types of assets. That's the same thing with centrally controlled and issued currencies, which are just bringing fiat currencies to the 21st century in terms of technology. But then fundamentally there's going to be an ever-increasing place for scarce assets, such as Bitcoin, which — we've been talking about this — is “Gold 2.0”. So very different niches, and they can exist simultaneously rather than compete with one another.

Matt Miller (03:53):

It always gets me when someone complains that Bitcoin is used for money laundering or the drug business. And then I think about the amount of money laundering that's done, or drugs that are purchased with the US dollar. It's just a silly comparison. Lately I've been thinking the same thing about the carbon footprint issue, a lot of concerns understandably about the carbon footprint of mining Bitcoin. On the other hand, the US dollar has a pretty darn big carbon footprint as well. How do you think about the ESG issues surrounding Bitcoin?

Antoni Trenchev (04:34):

I think about it in terms of how do we produce energy and that obviously with the growth rate of population of economies, the constant consumption, we have to find a holistic answer to it, and China has to be in on it as well because without them and the US, you know, whatever we do is just another drop in the sea. With every bull cycle of Bitcoin, there are certain narratives trying to spread fear, uncertainty and doubt into the minds of investors. This latest round is going to be the Green Deal. Obviously it's very important, but so it is for the automobile industry. So it is for air travel. It is not Bitcoin-specific. It has to be addressed as a general issue affecting every aspect of human life.

Yousef Gamal El-Din (05:26):

I mean, with the amount of momentum, not just behind Bitcoin, but behind the crypto space at this minute, your business must be doing quite well. Can you qualify and quantify that for our global audience? Where are we at?

Antoni Trenchev (05:37):

Sure. Well, Nexo is a digital assets institution which provides services to the blockchain space. Right now we have an excess of $15 billion in assets under management. The two lines are predominantly the crypto-backed loans, which allow you to tap in to your crypto wealth without selling. And then we offer the ability to earn up to 12% per year within this low-yield environment and compared to what your JP Morgan account or Bank of America is yielding, which is quite enticing. We are also tapping into the exchange space as of recently with our internal exchange. So, you know, we're seeing a double-digit growth of users. We have more than a million active users and it's been a stellar rise.

Matt Miller (06:26):

Antoni, I think a lot of your customers as well feel like real stakeholders in the business. And that's why I'm wondering how close you are to going public, to giving them an actual share in the company. And I love that Coinbase is doing a direct listing rather than an IPO. So you don't have to be a big wig and get syndicated. You can actually buy in with everybody else. Don't you think Nexo customers want the same chance to own a piece of the business that you started?

Antoni Trenchev (06:57):

Well, we already have made steps in that direction in the sense that we have our native NEXO Token, which entitles you to a portion of Nexo's profits, 30% of them. We are now launching a governance element to it. In a governance token where the holders of the native asset — which is even easier to do than a direct listing or an IPO — they already have a say in the way Nexo is being run. So we are ahead of the curve here with regards to a more traditional approach to public accessibility. We are, obviously, evaluating all options. Let's see how Coinbase does and what happens the day after, whether we're going to see some pullback and how they perform. But at the end of the day, you can't expect to be drinking champagne in the evening if you're afraid of the hangover in the morning.

Matt Miller (07:57):

Yeah, absolutely perfume going in, garbage coming out – so my dad always told me. Antoni, thanks so much for joining us — Antoni Trenchev, Nexo Co-founder and Managing Partner, really fascinating company there Yousef, and one of the first to offer credit, really, for crypto holders, to offer big whales, for example, a way to get exposure without having to necessarily liquidate positions.

Yousef Gamal El-Din (08:28):

Yeah, I am a bit skeptical though, about the amount of upside we've seen in the last few days in Bitcoin. So that's going to be one we're going to watch carefully, as we count down to that big listing.

Matt Miller (08:37):

The last 10 years — people are always skeptical. When it hit a thousand, I remember Joe Weisenthal was like “you're crazy, man.” And, um, you know, then we hit $17,000, $20,000 in 2017, and now it's $60,000.

Yousef Gamal El-Din (08:56):

I'm not saying I'm skeptical of Bitcoin, I'm just saying that I'm skeptical in the next few days, and then it will potentially resume and pick up where it left off. And then it's also way too early for me to be drinking champagne. Although he did say that that comes in the evening anyway.