https://www.forbes.com/sites/davidpetersson/2018/11/07/cryptocurrencies-are-falling-but-there-is-a-smart-way-of-using-them/amp/Crypto lending
While banks are starting to engage with cryptocurrencies, there is still a long way to go. According to Antoni Trenchev, cofounder of Nexo, “banks are if not hostile, then at least suspicious of cryptocurrencies.”
He explains: “Early on Bitcoin has been associated with the dark web and all sort of dodgy activities. But nowadays these illicit transactions are a single percentage of the overall transactions volume. The number one currency for criminals and money-launderers still is the USD and no one would fantom to remove fiat currencies. KYC and AML for crypto are harder and are expensive for the banks, hence a lot of the banking institutions shy away from it.”
This explains why banks have traditionally been reluctant to accept crypto as collateral. This has forced crypto holders to sell their cryptocurrencies for fiat before they can use it in any bank-related activities. But many who believe that the price of their investments will rise are reluctant to do so. Here is where crypto lending projects come in.
By accepting crypto as collateral, these projects allow people to hold on to their tokens while being able to make use of their wealth. According to Trenchev, “We have had people borrow for all sorts of purposes from buying a car and going on a vacation to purchasing a new home, which are pretty significant events in people’s lives.” The same people banks turned down.
Nexo, which is backed by TechCrunch founder Michael Arrington, has introduced several initiatives over the past few months and recently became the first project to accept XRP as collateral. The company, which functions as a bridge between the crypto world and the financial world, has also offered the only protection on the market for stablecoins by guaranteeing a 1-to-1 conversion for any stablecoin that is registered on its platform.
Recently, Nexo ranked as the coin with the highest ROI since this October. (Nexo hasnt even warmed up yet
)
It is unlikely this was the result of a pump and dump scheme as there was no peeks nor sharp drops.
But whether the steady increase continues remains to be seen.
For now, it shows that while cryptocurrencies have slumped, there are still huge opportunities when it comes to investing in cryptocurrencies.
