The Risk Is Bigger Being Outside of Crypto, Rather Than Being in and Losing
Yesterday, Nexo Co-founder and Managing Partner Antoni Trenchev sat down once again with Bloomberg’s Matt Miller and Anna Edwards to share his insights on the DeFi industry, Ethereum’s price jump, and Nexo’s growth over the past months.
Watch the full interview here:
A transcript of the video is available at the end of this article.Here are some of Antoni’s key points:
- Presently, the risk is bigger being outside of crypto, rather than being in and losing.
- DeFi's promise of trustless, intermediary-free banking and financial transactions is one of the key factors behind the doubling of Ethereum's value over the past year.
- Nexo partners with DeFi companies, implementing their solutions and acting as a link between decentralized protocols and CeFi.
- Over the past six months, Nexo has seen an incredible double-digit percentage growth.
This has been a busy week across digital and traditional finance. Read, watch, and listen to Antoni’s take on the FinCEN leak in Decrypt, radical change in finance on Charlie Shrem’s Untold Stories, and financial literacy in crypto in Cointelegraph.
We would love to hear your thoughts on these topics via Twitter.
Welcome back to Bloomberg Markets. This is the European Open 30 minutes away from the start of cash trading and looking at futures that are pointing higher across the major European equity benchmarks just about a quarter to a third of 1%.
So what is the best performing asset class so far this year? It’s not gold, it’s cryptocurrencies. And while we’re not seeing the 1000% gains of 2017, Bloomberg’s Crypto Galaxy Index is up more than 67% since the beginning of this year. Bitcoin has performed well this year but much of the gains in this index really are due to other coins like Ethereum which has more than doubled in value during the period.
We’re joined now by Antoni Trenchev Co-founder and Managing Director of Nexo. Antoni why don’t you start off by telling us why you think we’ve seen these big gains especially in Ethereum as opposed to Bitcoin.
Well, it has something to do with something called the DeFi space which is decentralized finance, one of the killer apps of crypto as such and it is the promise of taking out the middle man and the need of trust when you transact on a daily basis like you would with your bank. And we’re seeing adoption across the board for such applications and that is what has driven the Ethereum price to this very high level recently.
Antoni, good morning. So, DeFi, decentralized finance, is that then the next big thing or just a short-term craze? Is this a part of the crypto universe that is very much a part of the future and here to stay?
Well, it very much could be so. This is a layer to it, so it comes into addition to what we already saw with Bitcoin, this decentralized concept of sovereign self-banking. And now we’re getting even more possibilities of borrowing, lending, earning yield in a very efficient, very transparent, very close to a trustless manner. Now obviously, there are still risks involved because it’s still a very young space, but so are the possibilities and it’s incredible. With Nexo, we are partnering with the DeFi guys and implementing some of the solutions. So because this is definitely the future of finance as a whole and we see that also through the institutional adoption and the guys coming into the space as well.
Yeah, well, let’s be honest it’s been kind of a dream scenario for you. I mean, you make money by lending out fiat against investors cryptocurrencies and as those assets climb or remain so stable, that’s the perfect environment. Are you concerned at all about a downturn?
Not really, not at this stage. Last time I was here in May, we talked about the halving. This set a permanent barrier as it increased the cost of production of Bitcoin to around $7000. I think this is very strong support. The market has given another $10 000 mark as another strong support. I think the risks are, right now, on the upside: You not being invested in Bitcoin, rather than investing and losing half of your net worth. And with Nexo, we’re in a perfect place because we’re positioned as this bridge between the brave new world of digital assets and the digital economy, and the traditional world. And we’ve been able to capitalize on that.
And how many of those digital assets do we need, Antoni? I was reading about crypto.com, one of the bigger cryptocurrencies, rising pretty quickly. Is there a limit to how many we can have? Is there a sense in having many or few? What’s the logic?
I love the fact, Anna, that we’re slowly converting you into a crypto fan. Last time you were rather skeptical. I would suggest for anyone first dipping their toes…
I don’t think I said that. (laughs)
I would suggest, for anyone who is new to the space, to start off with Bitcoin itself because this is digital gold, this is where we have the longest Lindy effect. It has been around the longest and the fundamentals are the strongest. Now obviously when Bitcoin has sort of established itself, people have also hungered for additional things and there’re different assets like Ethereum that might perform very well. Not to toot our own horn here, but companies such as ourselves which are positioned at this middle ground between DeFi and CeFi have a lot of potential as well. So, you know, caution, but the risk is really being outside of it all rather than being in and losing.
How much has your business grown, Antoni? How many people loath to let go, to sell their cryptocurrency, and would rather lend it to you in exchange for cash when it’s necessary, when they need that kind of liquidity?
The past six months we have seen a double-digit percentage growth month on month and it has been incredible. More and more people come to the realization that holding the best performing asset of the past decade. And now the same asset outperforming any other asset year-to-date, it is better to borrow against it rather than sell it in the open markets because it’s tax-efficient, because it keeps your upside potential. And interestingly, I looked at a statistic recently, we see on a year-to-year basis a quadrupling of the boomers that are coming to such platforms as Nexo to conduct their business and to get engaged with cryptocurrencies.
Antoni, thanks very much. Thanks for joining us, good to speak to you. Antoni Trenchev, the Co-founder and Managing Director of Nexo, thanks for talking to us on the European Market Open.