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

Co-founder and CEO of the Nexo landing platform Antoni Trenchev compared the current collapse of the cryptocurrency market withbanking panic of 1907. 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 panic1907 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.

По его словам, сейчас на рынке сложилась схожая ситуация. Глава Nexo подчеркнул, что компания стремится быть частью решения, которое приведет к консолидации криптовалютной отрасли. 

Он рассказал, что к платформе обратились три "everyday" Wall Street bankers who want to "use their experience with paying customers to turn things around." 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 the withdrawalfunds and transactions 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 have called bankruptcy of Celsius almost inevitable, and the Securities Commissions of five US states have begun examining the company's activities as a "priority". 

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

In his opinion, companies that issued unsecured loans to 3AC should be concerned. At the same time, he believes that the market will not see a “chain reaction”, since the worst is already 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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