NEXO changing the way we borrow and manage crypto

Borrow Against Your Cryptocurrency with Nexo: Unlock Liquidity Without Selling Your Digital Assets

As cryptocurrency continues to become a larger part of many investors' portfolios, more people are looking for ways to use their digital assets without selling them. One of the most popular financial tools available today is a crypto-backed loan, and Nexo has become one of the leading platforms offering this service.

Instead of selling your Bitcoin, Ethereum, or other supported cryptocurrencies when you need cash, Nexo allows eligible users to borrow against their holdings while continuing to own them. For many investors, this can provide flexibility while maintaining long-term exposure to the crypto market.

What Is a Crypto-Backed Loan?

A crypto-backed loan works similarly to a home equity loan or securities-backed line of credit. Rather than selling your assets, you pledge eligible cryptocurrency as collateral and receive a loan based on a percentage of its value.

For example:

• You own 1 Bitcoin.

• Rather than selling it, you deposit it as collateral.

• Depending on the asset and Nexo's lending criteria, you may be able to borrow a percentage of its value.

Because you continue to own the underlying cryptocurrency (subject to the loan agreement and collateral requirements), you can potentially benefit if its value increases while still accessing liquidity today.

Why Borrow Instead of Selling?

One of the biggest challenges for long-term crypto investors is deciding when to sell.

Imagine needing funds for:

• Home improvements

• A vehicle purchase

• Business expenses

• Investment opportunities

• Emergency costs

• Vacation or travel

Selling cryptocurrency can mean giving up future upside if prices later increase.

Borrowing against your holdings allows many investors to meet short-term cash needs while maintaining exposure to their digital assets.

Potential Tax Considerations

One potential advantage often discussed with crypto-backed loans is taxes.

In many jurisdictions, selling cryptocurrency may create a taxable event, while borrowing against crypto generally does not create a taxable sale by itself.

However, tax laws differ by country and individual circumstances, so it's important to speak with a qualified tax advisor before making financial decisions.

How Nexo Works

Getting started with Nexo is designed to be straightforward.

Step 1 – Create a Free Account

Sign up for a Nexo account and complete identity verification (KYC).

Step 2 – Deposit Supported Cryptocurrency

Transfer eligible cryptocurrencies into your Nexo account.

Supported assets may include popular cryptocurrencies such as:

• Bitcoin

• Ethereum

• USDC

• USDT

• Solana

• XRP

• and many others (availability varies).

Step 3 – Request a Loan

Once collateral is available, eligible users can request a crypto-backed loan. The amount available depends on factors including the type of collateral, its market value, and Nexo's loan-to-value (LTV) limits.

Step 4 – Receive Your Funds

Depending on your location and available services, loan proceeds may be received through supported bank transfer methods or as stablecoins.

No Traditional Credit Checks

Unlike many traditional personal loans, crypto-backed loans are generally based on the value of your collateral rather than your credit score.

Because the loan is secured by digital assets, the approval process can differ significantly from unsecured consumer lending.

Flexible Repayment

Many crypto investors appreciate that crypto-backed loans often provide flexibility.

Depending on the product and jurisdiction, borrowers may be able to:

• Repay early without prepayment penalties (where applicable)

• Make partial repayments

• Keep the loan open while maintaining required collateral levels

Always review the current loan terms before borrowing.

Understanding Loan-to-Value (LTV)

Loan-to-value, or LTV, represents the percentage of your collateral's value that you borrow.

For example:

• Crypto value: $20,000

• Loan amount: $10,000

• LTV: 50%

Different cryptocurrencies have different maximum LTV ratios because of differences in volatility and risk.

What Happens if Crypto Prices Fall?

It's important to understand the risks.

If the value of your collateral declines significantly:

• Your LTV increases.

• Nexo may request additional collateral or partial repayment.

• If action isn't taken, some collateral could be liquidated according to the loan agreement.

For this reason, many experienced investors choose to borrow well below the maximum available amount to provide a larger safety cushion.

More Than Just Borrowing

Nexo also offers additional features for eligible users, including:

Buy and Sell Cryptocurrency

Purchase and trade supported digital assets within the platform.

Crypto Swaps

Exchange one cryptocurrency for another without transferring between multiple services.

Interest on Eligible Assets

Certain supported assets may qualify to earn interest. Rates depend on the asset, account tier, and applicable regulations.

Security Features

Nexo promotes several security measures, including:

• Two-factor authentication (2FA)

• Withdrawal address whitelisting

• Identity verification

• Institutional-grade custody arrangements for applicable services

• Ongoing security monitoring

Protect Your Crypto Beyond the Platform

While platforms like Nexo provide robust security features, it's still a good practice to think about where you store your assets.

At Crypto Project Watch, we encourage every crypto investor to learn the difference between platform custody and self-custody.

For digital assets that you're not actively using for trading, borrowing, or earning interest, many investors choose to store them in a hardware wallet.

Two of our favorite self-custody options are:

• Tangem Wallet

• Ledger Hardware Wallets

These wallets allow you to maintain control of your private keys while reducing exposure to many online threats.

Is Borrowing Against Crypto Right for You?

Crypto-backed loans are not the right solution for everyone.

They may be worth considering if you:

• Believe in the long-term value of your cryptocurrency.

• Need access to cash without immediately selling your holdings.

• Understand the risks of collateralized lending.

• Have a plan for repayment.

• Are comfortable with the possibility of collateral liquidation if market conditions change.

On the other hand, if your financial situation cannot withstand significant cryptocurrency price swings, borrowing against highly volatile assets may not be appropriate.

Final Thoughts

Nexo has become one of the more recognized digital asset platforms by combining crypto lending, trading, swapping, and eligible interest-earning products into one ecosystem. For investors who understand both the opportunities and the risks, borrowing against cryptocurrency can be a useful financial tool that provides liquidity while preserving long-term exposure to digital assets.

As with any financial decision, take the time to understand the platform, review the loan terms, consider the risks, and seek professional tax or financial advice when appropriate.

At Crypto Project Watch, our mission is to help people confidently navigate the world of cryptocurrency through education, security, and practical guidance. Whether you're exploring Nexo, learning about self-custody with Tangem or Ledger, or simply trying to better understand digital assets, we're here to help you make informed decisions every step of the way.

Join NEXO today https://www.cryptoprojectwatch.com/nexo-crypto-investing

Disclaimer: Cryptocurrency investing and borrowing involve significant risk, including the potential loss of assets. Product availability, interest rates, loan terms, and supported services vary by jurisdiction and may change over time. This article is for educational purposes only and should not be considered financial, investment, legal, or tax advice.