ADVFN News |  NEXO prices fell 40% in three days on rumors of a relationship with a ‘bankrupt’ crypto fund

ADVFN News | NEXO prices fell 40% in three days on rumors of a relationship with a ‘bankrupt’ crypto fund

Nexo (BINA: NEXOUSDT) prices continued to decline on June 15 as cryptocurrency trading companies trembled due to the downturn in the cryptocurrency market.

Meanwhile, Nexo Three Arrows Capital (3AC), a Dubai-based cryptocurrency fund, has denied rumors that it faces the risk of bankruptcy.

NEXO Price is suffering from fear of DeFi infection

NEXO, which serves as a security token on a cryptocurrency transaction platform of the same name, is down about 25% to $ 0.61 per unit, its lowest price since January 2021.

As part of a larger negative move this week, a huge intraday fall has extended NEXO’s losses to 40%.

A continuous transition in the cryptocurrency transaction sector has contributed to the low performance of NEXO.

Traders fear that most DeFi / CeFi companies, which offer customers high yields on their cryptocurrency deposits, will default on their loans in 2022 due to the exclusion of about $ 1.5 trillion from the cryptocurrency market.

Concerns continue to mount after the collapse of the $ 40 billion algorithmic stabilization project Terra in May.

One month later, Celsius Network, which offers customers up to 18% yield, stopped lifting due to “extreme market conditions”. Its clients have withdrawn nearly half of their assets from the platform since October 2021, leaving about $ 12 billion until May 17 to meet the debt obligation.

Meanwhile, 3AC, a cryptocurrency hedge fund, has witnessed a liquidation of at least $ 400 million. In addition, on-chain data reveals that the company may have a minimum debt of $ 183 million compared to a অবস্থ 235 million (derived from stacked ether) parallel position.

If the fund goes bankrupt it can transfer financial risk to its creditors.

“Lenders will bear the PnL difference [lucros e perdas] “How much do they owe in the settlement of their bail and what will they get?” Observed Digenttrading, a market commentator known for highlighting Celsius network settlement issues.

He added:

“This means that defaults will erode the signature equity.” […] Not all creditors are the same. Celsius is the worst. He went bankrupt. Nexus, I don’t know. Blockfy is bad too. “

However, Nexo says that despite sharing funding for a non-fungible token loan (NFT) product in December 2021, it currently has no exposure with 3AC. The company claims that its partnership with 3AC has not stopped

What’s next for the NEXO token?

Nexo has 100% liquidity to meet its $ 4.96 billion debt obligations, according to American auditing firm Armanino. This increases the company’s chances of avoiding a cash crunch in the face of rising withdrawal rates as opposed to Celsius.

However, the price of NEXO continues to move in a downward risk, mainly due to the dire state of the cryptocurrency market in an environment of high interest rates. The NEXO / USD pair now sees the $ 0.58 to $ 0.706 range as temporary support due to its historical significance from December 2020 to January 2021.

NEXO’s Bulls I could be $ 0.883 as a temporary bullish target for a rebound from the $ 0.58-0.69 range. This level was helpful as support during the price decline in early May.

On the other hand, a fall below the $ 0.58 to $ 0.69 range could result in NEXO’s December 2020 support level hovering around $ 0.43, about 35% lower than today’s price.

Written by Jesus Gola

Disclaimer: ADVFN does not recommend assets. The article is journalistic. The opinions expressed in this article are those of the author only. Content is intended for informational purposes only. It is very important to do your own analysis before making any investment.

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