Nexo Eyeing M&A Targets Amid ‘State of Fear’ In Crypto Market

According to Nexo co-founders, as the crypto market has entered “a state of fear,” and “nobody can say” whether the bottom has already been reached, big crypto lender Nexo (NEXO) is looking for opportunities to acquire distressed companies.

Kalin Metodiev, the firm’s co-founder and managing partner, said in a live-streamed AMA (ask me anything) session on Tuesday that the market has now transitioned from an “overly optimistic state” to “a state of fear.”

“We believe there is some volatility on the horizon still, and nobody can say whether this is the bottom,” Metodiev added, warning investors to “definitely buckle up” and be ready for whatever comes next.

Nexo is a cryptocurrency loan and borrowing company with a business plan similar to Celsius (CEL), the struggling large crypto lender that recently froze all customer withdrawals due to “extreme market conditions.”

In response to the crisis surrounding Celsius and the broader sector, Metodiev stated that “some companies have gone into trouble for various reasons,” and that Nexo had begun undisclosed “conversations” with some of those ailing companies.

He emphasized that Nexo is just interested in the betterment of the industry and is doing everything it can to help.

“We have always been very open about our commitment to the growth of the ecosystem … we are always interested in supporting companies, partnering [with] projects and teams that have a clear vision of how they can create an innovative product that will be demanded by the blockchain community,” said the Nexo co-founder.

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He went on to say that one way this commitment to ecosystem companies could express itself is by a prospective “acquisition of certain parts of the business or the entire business.”

As previously reported, Nexo made an approach to Celsius earlier this month to acquire “all or part of Celsius’ qualifying, outstanding collateralized loan receivables.”

In the same AMA session, Nexos’ other co-founder and managing partner, Antoni Trenchev, predicted a wave of “consolidations” in the crypto business in the future. According to him, the transformation will take shape in the same way that acquisitions and consolidations have transformed the traditional banking industry over the years.

Trenchev stated that this will “hopefully be for the betterment of the space.”

Furthermore, the CEO of Nexos responded to a query about whether the company’s “high yields” are sustainable in the current market situation, without going into much explanation about how the yields are generated.

“In order to pay you six percent, we have to go out and make at least eight percent to make it all work,” Trenchev explained, adding that “this all goes back to the model’s sustainability.”

“At the end of the day,” Trenchev responded to the query, “it’s better to have a lower yield but a more secure product than prospects of double-digit yields that will result in a 100% loss.”

Finally, when questioned if Nexo could possibly survive a two-year bear market, Metodiev agreed that “it’s not fun in a bear market,” adding, “I hope the bear market will not last two years.”

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In either event, Nexo has a “a very strong financial position,” according to Metodiev, who did not elaborate.

At 15:04 UTC, NEXO was trading at USD 0.698, down 3% on the day. The price has also dropped by 7% in a week and by 48% in a month.