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Financing with Crypto

Mar 19, 2019·4 min read
Financing with Crypto

Nexo is here to help you afford the necessities and luxuries that you were thinking about when contemplating to sell your crypto assets in order to finance them.

Everybody has desires that they just do not have the cash on hand to acquire — maybe it is a dream home, maybe a dream car, maybe a dream vacation — and considering the current state of the cryptocurrency markets, it is perhaps not the wisest idea to sell off crypto-holdings to finance those dreams.

At Nexo, we have developed an alternative to clearing your portfolio that provides HODLers with the funds to finance their aspirations while letting them retain full ownership of their digital assets.

How Nexo helps your finances?

Nexo allows its users to take out instant crypto credit lines within minutes of joining the platform.

With over ten years in online consumer lending and e-commerce financing, Nexo is the most experienced among lenders in the cryptocurrency space and the only one that services tax-efficient instant crypto credit lines in more than 45 different fiat currencies and in 200+ jurisdictions.

Here is a quick guide on how Nexo works:

getting-your-nexo-loan-in-three-easy-steps

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Individuals simply make a deposit choosing from Bitcoin(BTC), Ether (ETH), XRP, NEXO Tokens and Binance Coin (BNB) as collateral and borrow against them. Тhe best part is that you retain full ownership of your digital assets throughout the lifespan of the credit line.

Clients only need to pay interest on the amount they have actually withdrawn to their bank account or spend via their Nexo Credit Card. The annual percentage rate (APR) is just 5.9% if NEXO is staked as collateral or used as a repayment option.

Alice’s Dream Vacation

For the sake of clarity let us examine a use case — Alice has $10,000 worth of BTC but would really like to have fiat currency so that she can afford to pay for her dream vacation to Hawaii.

Alice could sell her $10,000 worth of BTC for $10,000 at an exchange, however, Alice would no longer have BTC holdings if she goes that route. It is important to mention that Alice is a firm believer in the bright future of Bitcoin and crypto in general, and therefore, it is essential for her to have BTC in her portfolio.

If Alice’s BTC increases in value from $10,000 to $20,000 in the weeks following her sale of the BTC, Alice would be losing out on a potential $10,000 that she could have had in her pocket (which would have easily allowed her to finance her dream vacation as well as retain BTC holdings in her portfolio!). In addition, Alice would have to pay capital gains tax on the crypto she sells. For an in-depth analysis as to how a Nexo instant credit line can help improve your tax situation, check out this post:

heres-how-nexo-might-help-you-with-your-tax-situation

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Although an over the counter exchange, broker, or centralized exchange could put the $10,000 into her hands, considering Alice’s situation — that she needs fiat currency, but would like to continue holding BTC — Nexo is the better alternative. Not to mention, the Nexo platform allows Alice to save the money from capital gains tax since she no longer has to sell her crypto-holdings.

Alice simply needs to login to her Nexo Wallet, deposit her $10,000 worth of BTC, and she will immediately have access to $5,000 that she is free to withdraw to her bank account or spend via her Nexo Credit Card. There are no minimum loan repayments or mandatory payment schedule. And no hidden fees.

So let’s say Alice took a credit line out in the full amount — $5,000 — that was available to her, and she decides to repay her credit line in Nexo Tokens, so her interest rate is 5.9%.

Alice would pay back $5,000 (original withdrawn amount) + $295 (5.9% interest on $5,000), for a total of $5,295.

And if the price of the Bitcoin goes up to $20,000, she would experience capital gains of $20,000-$5,295=$14,705 minus $10,000 (because that was the amount she initially had). Alice has enjoyed capital gain of $4,705, while remaining the owner of her BTC and was able to leverage her crypto as collateral to afford her dream vacation.

More Crypto-backed loans — fewer sacrifices

As you can see from this example, you don’t always have to make sacrifices to afford your dreams. Alice took that trip to Hawaii, kept her crypto portfolio, enjoyed the growth of her crypto portfolio, and managed to avoid paying capital gains tax because she decided to take a Nexo instant crypto-backed credit line opposed to selling her crypto.

If Alice were to go the route of an exchange or OTC, sure she would have been able to finance her vacation (all the same), however, she would no longer have any exposure to BTC, would lose the crypto holdings that were dear to her considering her beliefs regarding the future outlook of the industry, and, she would have to pay capital gains tax since she sold her crypto-holdings.

Speaking of enhancing your portfolio, Nexo has recently fulfilled one of its esteemed promises — on December 15th 2018, the then 7-month-old company paid out a dividend of $912,071.00 (30% of profits) to the Nexo Token holders. Delivering on these promises has allowed us to process more than $300,000,000 to a rapidly growing user base of +170,000, to develop the most seamless lending experience and with it the means for our clients to earn up to 6.5% in interest on their idle crypto assets.

Nexo’s instant credit lines require minimum loan amount of $500 and go up to $2,000,000 per client. Better yet, the company has recently become the only crypto lender to offer insured custody for up to $100M with its long-standing partner BitGo and high-level protection of London-based insurance company Lloyd’s.

Don’t sell your crypto, finance with Nexo!

When money is on the line, it is not always easy to reach the desired outcomes, yet, remain financially comfortable. Precisely with that in mind did we develop the concept of Nexo.

We put you in the comfort zone by extending you a credit line against your crypto and you retain the full ownership of your assets through the duration of the loan. Such trendsetting innovations allow individuals to afford and finance their necessities and dreams, yet, keep their exposure to the rapidly growing financial class of digital assets.

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