Cryptocurrency lender Nexo has announced that it is allocating another $50 million for periodic buybacks of NEXO tokens in the open market. The company states that it is the second time it is investing money to repurchase the tokens. Previously, it had allocated around $100 million in May to repurchase NEXO tokens.
These $50 million will be used over the next six months to buy NEXO tokens at discretion. The decision was taken in the meeting of the Board of Directors of Nexo Capital. Moreover, NEXO has managed to stay above the line in this turbulent crypto market. Many of its competitors including, Celsius Network, Three Arrows Capital, and Voyager Digital went into bankruptcy. All of these were well-reputed names in the industry. However, they could not sustain the pressure caused by the bear market.
Nexo Aims to Showcase its Liquidity
The $50 million buyback plan represents around 10% of the token’s total market cap. Nexo plans to buy back in portions depending on the market condition to not influence the token’s market price directly. The coin wants to show that it has kept a solid liquidity position at a time when many crypto firms and exchanges were forced to suspend withdrawals or halt operations.
Nexo’s Co-Founder and Managing Partner, Antoni Trenchev said “The allocation of an additional $50 million to our buyback plan is a result of our solid liquidity position and Nexo’s ability and readiness to spur on its own products, token, and community, alongside its outward-facing initiatives of injecting liquidity into the industry.”
Furthermore, Trenchev said that the NEXO token has moved along with Bitcoin and Ethereum despite the difficult market conditions. This shows the demand and stability of the asset. At the time of writing, NEXO has a market cap of over $609 million. It has gained over 10% during the last seven days, as it trades at around $1.08.
Furthermore, the exchange says that the repurchased token will be locked and placed in the Investor Protection Reserve for 12 months. After the vesting period, the company could use these tokens to make strategic investments and pay daily interest. However, the exchange has no plans to burn its tokens for reducing the total market supply.
Over the past few months, Nexo has gained a reliable reputation in the market. While many organizations laid off their employees, it announced a 200% increase in its employee headcount over the last year. Moreover, the company continues to make solid investments to increase its influence.