Xapo Bank Launches Bitcoin-Backed Loans for Long-Term Holders

Xapo Bank has launched Bitcoin-backed loans aimed at long-term holders, allowing them to borrow up to $1 million with Bitcoin as collateral. As institutional confidence and market sentiment shift towards holding rather than selling, this product offers flexible loan-to-value ratios, helping investors manage expenses while keeping their BTC and potentially benefiting from its appreciation.

In a notable move for digital finance, Xapo Bank has rolled out Bitcoin-backed loans, appealing primarily to long-term holders of the cryptocurrency. The bank’s CEO, Seamus Rocca, emphasised that as institutional backing increases, investor confidence in Bitcoin is also rising. Currently, Bitcoin’s price is sitting between $95,000 and $97,000, prompting many investors to opt for loans instead of liquidating their assets.

The new lending product, which debuted in March, allows clients to secure loans of up to $1 million by using their Bitcoin as collateral. This offering is indicative of a broader shift in market sentiment, where many investors are transitioning away from short-term speculative strategies towards a more substantial, long-term perspective. Rocca noted that the increasing acceptance of Bitcoin, including through ETFs, is influencing this positive trend.

This lending facility provides a flexible loan-to-value (LTV) ratio, which means borrowers can access necessary liquidity without parting with their Bitcoin. With conservative LTV ratios in place, Bitcoin’s price would have to drop significantly before any liquidation occurs, making it a strategic choice for those holding onto their cryptocurrencies for the long haul.

Additionally, this product assists investors in managing unexpected expenses while still allowing them to benefit from potential Bitcoin appreciation. Essentially, it’s a way for holders to keep their assets intact while being financially agile.