Xapo Bank has announced a new service allowing clients to take out loans secured by Bitcoin.
Bitcoin-Backed Loans by Xapo Bank
Xapo Bank is offering a new service that allows clients to obtain loans using Bitcoin as collateral. Customers can obtain up to $1 million in loans, excluding those from the UK and Australia. Xapo aims to secure clients' investments by providing Bitcoin as a long-term financial instrument.
Partnerships and Regulations
With Bitcoin's growing popularity in the U.S., Wall Street companies like Cantor Fitzgerald are launching their own Bitcoin financing programs. Xapo was one of the first to open a physical headquarters in Gibraltar and has received regulatory approval in the UK, offering clients interest-bearing Bitcoin accounts. Previously, Coinbase and Morpho Labs provided similar services, but ceased them in 2023.
Market Competition and Trends
Coinbase offers U.S. clients Bitcoin-backed loans, helping avoid taxable events and simplifying the lending process. The crypto-backed loan market is expected to grow to $45 billion by 2030. Institutions and DeFi protocols are increasingly interested in cryptocurrency lending opportunities, and competitors like Ledn also see strong demand for similar products.
The Bitcoin-backed loan market continues to expand, offering investors new ways to use cryptocurrency as collateral and increase liquidity without selling their holdings.
