Nexo CEO compares crypto-market crisis to 1907 bank panic

Nexo co-founder and CEO Antoni Trenchev compared the current plunge in the cryptocurrency market to the panic of 1907. In an interview with Bloomberg, he noted that stronger players must come to the aid of their peers in an effort to prevent a collapse of the industry.

“Honestly, this reminds me of the panic of 1907, when J.P. Morgan was forced to intervene with his own funds, and then unite all solvent players to fix the situation. This happened before the Federal Reserve System appeared, so there was no lender of last resort,” Trenchev said.

According to him, a similar situation now prevails in the market. Trenchev stressed that the company aims to be part of the solution that will lead to consolidation of the crypto industry.

He said three “household” banks on Wall Street approached the platform, hoping to “use their experience working with creditworthy clients to fix the situation.” In his view, the industry is moving toward M&A deals and consolidation.

Earlier, Nexo said it was ready to acquire Celsius’s loan portfolio from its competitor — Celsius. The offer is valid until June 20.

On June 13, 2022, Celsius Network suspended withdrawals and operations on the platform “due to extreme market conditions.” According to experts, the real cause was a “liquidity crisis,” which prevented the company from making payments to clients.

Some called Celsius’ bankruptcy almost inevitable, and the Securities and Exchange Commissions of five U.S. states began examining the company’s activities “on a priority basis.”

Nexo also collaborated with Three Arrows Capital (3AC) on developing a credit product based on NFT, 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 view, those that issued unsecured loans to 3AC should be concerned. At the same time, he believes the market will not see a “chain reaction,” as the worst is already behind us.

“I think the things that happened to them are largely already priced in and the selling pressure we observed on Monday and Tuesday,” he explained.

Earlier in April, Trenchev predicted the bitcoin price would reach $100,000 in 2022.

Read ForkLog’s bitcoin news in our Telegram — cryptocurrency news, prices and analytics.