The First “Spend & Save” Report: How the Nexo Card Saved 10,500 Bitcoin from Being Sold to the Market

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TL:DR: In the first-ever “Spend & Save” consumer insights report, we will look at something more valuable than how much people have spent:

  • How much crypto have Nexo Card holders kept instead of selling at current prices?
  • What are the spending habits of Nexo Card holders?
  • Is this revolutionary product changing the way people approach their finances?
  • How can one both get liquidity and retain ownership of their assets?

In today's world, spending money is easier than ever. However, when it comes to keeping your assets, that can be a different story. This is especially true for those interacting with cryptocurrencies, where market fluctuations, various day-to-day expenses, and/or larger lifelong purchases can make it tempting to sell.

This is where the Nexo Card comes in – with the goal of revolutionizing the way we spend by offering a solution that allows individuals to get instant liquidity. How? By borrowing against their assets rather than selling them.

About the Nexo Card

We launched the Nexo Card with Mastercard and DiPocket in April 2022. Its goal was simple – to build on top of Nexo’s flagship crypto credit lines by adding an instant means of payment. Nothing new under the sun, one might say – a crypto card? It is actually quite different from what already exists. The Nexo Card comes with a certain freedom attached to it: the freedom to have your crypto and spend it, too. In a nutshell:

  • What? The Nexo Card gives you cash to spend.
  • How? By simply taking out a loan which uses your crypto holdings as collateral.
  • Why? Because you have daily expenses to cover but you still want to keep your crypto and grow it.

Without further ado, let us show you the Nexo Card’s benefits with a few real-life examples. The following consumer insights are based on actual cardholders’ data. We collected the data between April 2022 and April 2023 – the first year since the card’s launch.

A Year of the Nexo Card's Impact on Crypto Holders' Savings and Gains

A typical consumer spending insight would look at how much/how/where people spend money, right? But we are offering a more valuable alternative: how much do they save by not selling their crypto?

Exhibit A: 10,500 Bitcoin/160,000 Ether Saved From the Market

Here’s the fascinating story of why and how Nexo customers used the Nexo Card over the past year and saved 10,500 Bitcoin/160,000 Ether from being sold to the market.

What was the primary reason they did that? We surveyed our borrowing clients directly, asking them: “Why did you get a crypto-backed loan?”

  • 81% said they needed cash and didn't want to sell their crypto
  • 68% said they wanted to put their crypto to good use
  • 54% used the funds to buy the dip

In a way, their decision to borrow has impacted the entire crypto market. If they’d chosen to sell or “dump” a large quantity of Bitcoin/Ether/another cryptocurrency instead, they could have caused several things to happen:

  • A Price Drop: The immediate effect would likely be a drop in the price of Bitcoin due to the sudden increase in supply on the market.
  • Increased Volatility: Large sales can increase market volatility, as traders react to the news, which can lead to rapid price swings.
  • Impact on Investor Sentiment: Depending on the context, it could impact investor sentiment. It could lead to a bearish trend as other investors sell off their holdings out of fear of further drops.

Instead, Nexo Card holders chose to:

  • Maintain Ownership: When you borrow against your assets, you don't have to sell them. This could be especially beneficial if the asset is likely to appreciate over time or provides you with income (like Nexo’s Earn product).
  • Take Advantage of Tax Opportunities: Depending on your jurisdiction and the nature of the asset, borrowing against it might carry tax advantages compared to selling.
  • Avoid Bad Market Timing: If you're borrowing against digital assets, you avoid having to time the market to sell at a peak. Selling these to fund a large purchase could mean you have to sell when the market is down.

In short, a lot of reasons not to sell those 10,500 Bitcoin/160,000 Ether.

Exhibit B: €54,000,000 Saved by Not Selling

We established that Nexo customers have saved 10,500 BTC/160,000 ETH from being sold to the market. While doing so, they also optimized taxes.

When a person sells an asset for a profit, they may be required to pay a tax on that gain. For instance, if an individual buys Bitcoin for €100 and sells it for €120, they might be subject to capital gains tax on their €20 gain.

For illustration purposes, on average European countries tax capital gains at 19.55%. What does this mean? For some early adopters, it may be a better approach not to sell their digital assets but to use them as collateral for loans.

Unlike most crypto cards, the Nexo Card lets you keep your crypto. With credit line rates from 0% APR* and no minimum monthly repayments, this means you can fund your daily purchases without selling your crypto.

*Nexo’s zero-cost credit is available to eligible Nexo clients who maintain an LTV of 20% or below.

Exhibit C: €5,000,000 Saved in Cashback

Nexo Card holders are not only keeping their assets, but they are also getting rewards in the form of cashback while doing so. In the first year alone, they have spent millions in value with their cards.

As a result, Nexo has distributed €5,000,000 in cashback to its users in one year. This incentivizes responsible spending while also giving back to the community in a currency of their choice: NEXO Tokens or Bitcoin. People stack the majority of their NEXO Token rewards in a fixed term to reach a higher loyalty level.

For example, if you spend €1,000 using your Nexo Mastercard and the cashback rate is 2%, you'll receive €20 back directly into your Nexo account.

Cashback can be beneficial for you as a customer because it essentially gives you a discount on your purchases. This can be particularly useful if you use your Nexo Card for everyday expenses like groceries, gas, and utilities, as those purchases can add up over time. You could save a significant amount of money each year just by using your card for regular expenses.

Where do these cashback rewards come from and how are they sustainable?

Nexo has been providing loans backed by cryptocurrency since 2018. Where we differ from everyone else is our advanced risk management system, which ensures that we only accept highly liquid collateral at appropriate loan-to-value ratios. This is true whether we're working with individual or institutional clients.

Nexo's main services include collateralized loans, earning interest on crypto, and trading services. These services work together to make the company profitable. If you want to learn more about Nexo's business model, check out this detailed blog post.

Exhibit D: The Nexo Card Is Used in 180 Countries

Physical and virtual Nexo Cards are being used in 180 countries because we don’t need to hold an actual piece of plastic in our hands in order to have liquidity anymore. A virtual card goes a long way:

  • Activate a virtual Nexo Card with a single tap
  • Add it to Apple Pay and Google Pay
  • Access cryptocurrency-powered liquidity wherever Mastercard is accepted
  • Make contactless withdrawals on most ATMs
  • You can’t lose it or have it stolen

From Pole to Pole, East to West, the Nexo Card is a seasoned globe-trotter, giving you money to spend here, there, and everywhere.

Exhibit E: People Make up for Lost Time Post-COVID

Analyzing the spending habits of Nexo Card users by merchant category reveals interesting trends, suggesting that the Nexo Card is not only practical for everyday expenses but also for larger purchases.

Here's an overview of how people have been spending their money between April 2022 - April 2023.

Transactions as % split by merchant category.
  • Online shopping and retail made up 47.2% of all money spent by Nexo Card holders.
  • Services came in second at nearly 14%, with customers opting to use their Nexo Cards to pay for everything from repair and personal services (such as salons and spas) through to various public and government services (such as education and healthcare).
  • Transportation costs as well as accommodation made up for a combined 13.1% of all money spent using the Nexo Card over the one-year period. It’s no surprise people have been treating themselves to some time away from home after the world’s return to normalcy post-COVID-19.
  • Other notable spending includes professional services and memberships, business services, and entertainment.

Overall, it seems like you have been making up for lost time and enjoying the freedom to spend your money on things that make you happy.

Exhibit F: What Does the Market Say?

Nexo was created to cater to the needs of HODLers and has been operating securely since 2018. And while the term “HODLing” might sound a bit outdated now, the latest data shows that behaviors of those who hold onto their digital assets haven’t changed much.

With the belief that their holdings will ultimately increase in value, long-term Bitcoin holders are taking advantage of the market dip to accumulate more tokens. Specifically, net BTC accumulation happening at the fastest pace since October 2021, according to blockchain analytics firm Glassnode.

The surge in the net position change indicator shows people view Bitcoin's current weakness as a typical bull market breather, and an opportunity to acquire more. Despite the decoupling of Bitcoin's price from Wall Street's Nasdaq index, holders remain bullish on the cryptocurrency's long-term potential.

Recent trends indicate that cryptocurrencies have gained momentum and people are becoming less inclined to sell their holdings. Instead, they are choosing to borrow.

Card Like No Other

To this day, Nexo’s credit lines and Nexo Card remain unparalleled with their user-friendliness and flexibility, not to mention the tried-and-tested, yet cutting-edge software technology facilitating them.

Overall, the Nexo Card's unique approach to borrowing against one’s assets rather than selling them has saved 10,500 Bitcoin from being sold to the market for short-term profit. It is also changing the way people manage their finances – using crypto to manage their purchases, no matter how big or small, while maintaining their digital asset holdings with the long run in mind.

Further reading:

Mastercard: Inside the Nexo Card, the crypto-backed card for HODLers

Nilson Report: Nexo’s Crypto Mastercard

Reuters: Nexo and Mastercard launch ‘world first’ crypto-backed payment card

Note: Nexo does not provide tax, legal or accounting advice and this information is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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