Crypto Lender Nexo experienced a flash crash, falling over 14.1% in the last 24 hours as of 3 p.m. ET on 6 Sep’2022. Traders have been buzzing about the upcoming Ethereum Merge, and Nexo may be on the wrong side of this trade.
Maintaining Stability During The Merge
In addition to halting some trading around The Merge, Nexo announced yesterday that it would support any proof-of-work forks that emerge. While there are no big news items today, Nexo announced last week that it would buy back $50 million of tokens, which helped drive its value higher. Some of the recent gains seem to be reversing today.
There has been a decline in crypto markets over the past few hours, which is not helped by stocks declining during the same period. The Merge trade that pushed Ethereum and crypto higher ahead of The Merge may be unwinding, or investors may be reacting to volatility. Trading of some assets may be paused on many exchanges in the next two weeks to maintain stability during The Merge, so traders may want to plan ahead.
Uncertain Times Ahead
Crypto markets are maturing rapidly, and The Merge is a part of that. But the process takes time, and speculation can be rampant prior to big moves. Nexo’s price has dropped over the past few weeks as a result of market uncertainty, and I wouldn’t be surprised if it dropped further if the crypto market remains depressed.