Nexo Card - How to Spend Without Selling Your Crypto
The popular centralised finance platform Nexo is introducing the Nexo Credit Card to allow its users to spend cryptocurrencies safely.
After Binance and Crypto.com, it is now Nexo's turn. Since a few days, registered customers can order for free the Nexo Card and spend their crypto funds through the mastercard circuit. The introduction of this card represents a step towards mass adoption for the cryptocurrency sector. As a matter of fact, from now on, all Nexo customers will have an additional advantage in holding their funds on the exchange, namely that of being able to use them as currency for electronic payments.
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There are no minimum amounts required for payments, and commission fees are zero. Nexo also guarantees cashback for electronic payments and atm withdrawals, up to 0.5% in Bitcoin or 2% in Nexo. The higher the wallet allocation in the Nexo token, the higher the percentage recognized as cashback.
Nexo Card: spending cryptocurrencies without selling them
It sounds strange, but through the Nexo credit card, you can use your crypto assets to spend money without necessarily having to liquidate your positions. In fact, the real news of the Nexo Card is that all customers can collateralise their funds to obtain a loan in order to make payments. If the loan to value is equal to or less than 20%, then the loan granted is interest-free. If the loan to value exceeds 20%, up to a maximum of 90%, the borrowing rate goes up to 13.9%. The loan to value (LTV ratio) is defined as the ratio between the amount of the loan granted and the value of the asset that the borrower places as a guarantee (or collateral). 
Why collateralise your Bitcoins?
Collateralising your Bitcoins allows you to have money for your expenses, but without having to liquidate a part of or all of your portfolio. This allows you to make the most of a bull market by continuing to hodl an asset while getting fiat. Let's make an example: Currently (April 2022) the price of 1 Bitcoin is around $40k. A guy holds 1 Bitcoin on Nexo and firmly believes that in the next few months, the price of Bitcoin will rise, but he has unexpected expenses and has to withdraw $4k from his account. The guy can then collateralize a portion of his Bitcoin - let's say 0.1 BTC - get a loan of $4k and pay his expenses. Let's now assume that after 6 months of bull market, the price of Bitcoin has doubled to $80k. At this point, the guy can use half of the Bitcoins he has collateralised to pay off the $4k loan, while keeping the remaining half. In a nutshell, he has paid his expenses without selling his Bitcoins, continuing to enjoy the bull market price increase. (By the way, did you know that it is possible to leave bitcoin as an inheritance? Someone has already done that!)
Binance Card, Crypto.com Card and Nexo Card: differences
Binance and Crypto.com exchanges’ cards differ from the Nexo Card mainly because the former two are debit cards, while the Nexo Card is a credit card. When spending funds with the Binance Card, for example, the crypto funds are automatically converted into fiat and spent. This helps to increase the selling pressure against an asset. With the Nexo card, on the other hand, it is possible to borrow and avoid selling one's assets. This practice helps, if adopted on a large scale, to decrease the volume of sales, thus positively influencing the price, at least in the short term. Nexo Credit Card: spending limits Like any credit/debit card, there are limits:
- 60,000€ per month and 10,000€ per day for electronic payments
- 10,000€ per month and 2,000€ per day (maximum 600€ per withdrawal) for atm withdrawals
- up to 10 free withdrawals per month based on the loyalty level
- up to 20,000€ per month in purchases abroad without currency exchange fees, based on the loyalty level
Some final thoughts
Nexo, Binance and Crypto.com, have certainly proved to be serious and reliable platforms. Nevertheless, for the sake of completeness and correctness of information, it should be pointed out that centralised platforms, such as Nexo, Binance and Crypto.com, however serious and reliable they may be, do not fully embody the ideals of decentralisation, which are fundamental ideals for an authentic Crypto Enthusiast. In fact, let’s remember the famous saying: "Not your keys, not your money.", i.e. when we use centralised platforms, the private keys are not actually in our possession. However, for less experienced users, considering using the services of these platforms and getting interest in staking might be a good idea. These platforms protect their users with insurance. In particular, Nexo is insured for 375 million dollars in the event of theft or hacker attack, has been rated as "excellent" by Trustpilot and is audited by the Armanino company.