Bitcoin Holders NEVER NEED To Sell – Here’s What They Do (Nexo)

**Scott Melker** (0:00)
Crypto lending became a dirty word after 2022 Yield looked dangerous, leverage looked reckless, and most of the biggest players disappeared. But Nexo did not. Now they're back in the United States, and the market is changing fast. Regulation is coming, institutions are here, and crypto-backed loans are growing once again.
Today, I'm talking with Neil Steinhardt from Nexo about the return of crypto lending.

**Neil Steinhardt** (0:23)
Crypto is democratizing everything, because now anybody who's got these holdings and wants to keep their assets and not sell can access capital. That's why I think it's becoming so popular.

**Scott Melker** (0:33)
How people are borrowing against Bitcoin and Ethereum?

**Neil Steinhardt** (0:36)
It's practically automated, right? They're collateralized loans, the risk profile is a little bit different, so we can take a look at your portfolio. As long as your LTV is okay, you can keep taking out loans all day long. You can take out eight loans today.

**Scott Melker** (0:46)
What makes a responsible platform different?

**Neil Steinhardt** (0:48)
We use institutional-grade custody. In the US., we work with partners like Bakkt. It's really just a combination of using best practices. We're SOC 2 compliant, we have all our ISO standards, and we're building things for the long term, and we're not trying to take any shortcuts.

**Scott Melker** (1:00)
And why the United States could become one of crypto's biggest growth markets. Let's go.
This is where I want to start, because obviously you're Nexo, and you were the, I'll almost call it the lone survivor in the C-Fi world from the 2022 collapse. And now yield is back, baby. Like, it is not a four-letter word anymore like it was, and leaves you, again, I think, sort of leading the charge. So let's just talk about that. I think the general broad environment right now for lending, yield and what's behind the scenes.

**Neil Steinhardt** (1:47)
Perfect, I think that's super cool.

**Scott Melker** (1:48)
Yeah, dive in.

**Neil Steinhardt** (1:49)
So, you know, it's interesting because, you know, as there's a maturity in the market, and obviously the regulatory environment's changed, you see, you know, people are always barring against securities, right? So you have helox, it would be the most common, right? Like everybody knows, hey, I can bar against my house, right? Security-backed lines of credit, right? Hey, the crypto is democratizing everything, because now anybody who's got these holdings and want to keep their assets and not sell can access capital, right? Nexo can give you a real-time decision and give you access, right? Without having to sell, no capital gains taxes, no, none of that. So at the end of the day, I think it's amazing, right?
There's a way forward for this, and that's why I think it's becoming so popular.

**Scott Melker** (2:33)
So how are people actually using it now? I mean, I remember in the early days, it was sort of extremely like low LTV, right? You had to be very conservative. Those would still blow up, of course, crypto volatility and rates were exceptionally high. I think across the market, they've broadly are starting to come down. And I think with tokenization now, it's going to be more blended with the rest of your portfolio. So I mean, what does the market look like right now and who's using it?

**Neil Steinhardt** (2:58)
So it's really interesting. So I think a lot of people like big purchases, so you want to buy a house, you want to buy a car.
We have a report from last year about our card spending, and 30 percent of the purchases were for experiences, travel, hotel, travel agencies. So people want to use their assets without having to sell them. And we have a new card report coming out next year, next couple of months really. This should be interesting about this year's spending. But basically, people want to buy the same things they want to do. They want to use it for trading.

**Scott Melker** (3:33)
How big is this market right now?

**Neil Steinhardt** (3:35)
Last quarter, it was about $70 billion, $73 billion. So Nexo is one of the few companies to actually grow their portfolio at that time. So it's a robust market, even in a downturn, right? There's a fair amount of volatility in the market, right? But people are still holding on to their assets, still bullish about the future.

**Scott Melker** (3:54)
How about the institutional side? Obviously, we know why retail uses it. You just laid out all the reasons why you would take a loan. A lot of people call them lifestyle loans.
And if the market does well, actually it's structurally a very positive thing for somebody to do, because it effectively pays itself off in the gage. But how are institutions using it? A lot of people have looked at Saylor, for example, and said, why aren't you putting these assets to work? Either with lending or option strategies or anything.