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Crypto isn't having a Lehman moment, according to the Nexo co-founder

 


The collapse of stablecoin TerraUSD (UST) has caused panic among stablecoin and general crypto market investors. While the Terra Luna Foundation has already announced a “recovery plan”, it has not yet impacted UST and LUNA prices as they are still in decline just like the general crypto market.


Do Kwon and TerraUSD backers had previously approached Nexo and asked it to support the UST stablecoin, but Nexo declined. When asked why they declined, Nexo co-founder Antoni Trenchev said in an interview with Bloomberg:


"I can't say much about the details of a rescue plan that's not finalized, nor do I want to get involved. I wish you good luck. We have made a decision at Board level that we do not believe it is prudent to interfere at this time. If they come up with another suggestion that we think makes more sense, we might reconsider. But at the moment we are holding back.”


The likelihood of the crypto market recovering

Although the TerraUSD collapse will most likely affect algorithmic stablecoins and not asset-backed stablecoins like Tether, it is being described by some as possibly the “Lehman moment” for crypto. Some crypto billionaires like SC, Michael Novogratz, and Sam Men Freed have lost 70%, 80%, and 90% of their fortunes in the past few weeks. But when Trenchev was asked by Bloomberg's Matt Miller if he thought this was a problem for the crypto industry as a whole, Trenchev said:


"I don't think it's a Lehman moment. Of course it's not the prettiest of appearances, but we have one or two such moments a year. Remember the ban in China last year and the drop of up to 50% the year before when we had Covid. So this time it's different because there are only a limited number of providers. On the Nexo platform and on our offerings there are up to 4 million retail users and a very large institutional clientele and I don't think they are selling as much as they are in 2020 or 2021. I think the pressure that BTC is experiencing at the moment, is the liquidation of the vast BTC reserves accumulated by the Terra Foundation. This is what puts pressure on the market. I'm curious if the 25,000 USD will hold up. Unless,


When Trenchev was asked to elaborate on when he thought the large-scale purchases would happen, he replied: 


“I think around 20… not until those foundations begin to swell, which we estimate should be soon. So $25,000 per bitcoin or worst case $20,000 should be the tipping point”

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