Crypto News

DeFi boom and Bitcoin rally position NEXO to close 2020 with a 480% gain

Over the past three months NEXO token, the native asset of Nexo’s blockchain-based lending platform, has increased by more than 480%. Since Bitcoin (BTC) traded for $10,000, NEXO price has closely tracked BTC but the performance is somewhat lackluster when compared to the 1000% rallies seen from a handful of DeFi tokens. 

NEXO/USDT daily chart. Source: TradingView

The project was initially revealed by the European FinTech Group Credissimo in late 2017 and claimed it would offer “the world’s first instant crypto-backed loans.”

Founded by Cresissimo employees Antoni Trenchev, Georgi Shulev and Kosta Kantchev, the original purpose of the platform was to provide crypto investors with a way to borrow against the value of their crypto assets as opposed to selling their assets and creating a taxable event.

Originally, Nexo planned to launch a public presale and main token sale, but those plans were canceled due to exceedingly high demand from its private sale to investors.

NEXO followed a trajectory that was similar to most of the projects that launched at the end of 2017 and early 2018 as the Bitcoin hype cycle was unfolding. The token’s value increased from around $0.10 when it first hit exchanges to over $0.40 in May 2018 before the reality of the crypto winter set and Nexo’s price dropped as low as $0.045 by September 2018.

Innovation appears to be driving Nexo’s price action

In late October, as Bitcoin was preparing to break out of the $10,000 to $12,000 range, Nexo launched its ‘Nexonomics’ initiative to help drive the adoption of its token and platform. The idea was to progressively introduce upgrades and new features to the platform through the end of 2020 in order to help drive the tokenomics and promote the utility of the token.

The team also introduced its “Earn in NEXO” program which allows users to earn an extra 2% APY if they opted to have all interest earned paid in NEXO.

Since the launch of Nexonomics, NEXO price has seen an increase of more than 480% with its market capitalization increasing from $68 million to its current value of $383 million over a three-month period.

During that time Nexo has also seen a significant increase in trading volume, increasing from a daily average trading volume of around $5 million to its current volume of more than $30 million.

Nexo and DeFi tokens look to ride the Bitcoin wave higher

As the crypto market heads into the final weeks of 2020 with Bitcoin reaching successive new all-time highs, Nexo looks well-positioned to hold on to recent gains and possibly head higher if there is a renewed interest in DeFi platforms.

In the past 6-months, a number of large institutions have opened sizable Bitcoin positions and the FOMO surrounding crypto could result in projects like Nexo receiving extra attention due to the niche that they fill and the reliable interest they offer on deposits.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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