Bitcoin-backed borrowing at Xapo Bank, located in Gibraltar, has seen a noticeable shift towards long-term financial planning rather than just immediate liquidity needs, as noted in their 2025 Digital Wealth Report.
According to the report shared with Cointelegraph, 52% of Bitcoin-backed loans issued in 2025 had a 365-day term, with many loans remaining open even as the creation of new loans slowed down considerably later in the year.
The bank, which primarily serves high-net-worth individuals and private clientele, observed this trend indicating that clients are utilizing Bitcoin as collateral to access liquidity while maintaining long-term exposure, rather than relying on loans for temporary cash requirements.
“Long-term Bitcoiners, many of whom hold most of their wealth in Bitcoin, are now comfortable realizing some profits,” the report stated. “Simultaneously, their conviction remains strong. Most long-term members still hold a majority of their Bitcoin during volatile market conditions.”
Translation: Long-term Bitcoin holders are now realizing profits while maintaining their investments.
The data is particularly insightful as it marks the first operational year of Xapo’s Bitcoin-backed lending product, enabling qualified clients to borrow USD against their Bitcoin assets. This integration illustrates how Bitcoin can serve as productive collateral within regulated banking frameworks, shaping longer-term financial strategies.
Transition from Initial Goals to Actual Patterns
Xapo launched its Bitcoin-backed USD loans on March 18, 2025, targeting long-term Bitcoin holders needing liquidity without the need to liquidate their assets. At launch, the bank described the product as a conservative alternative to prior crypto lending models, featuring loan terms extending up to 365 days with relatively lower loan-to-value ratios.
In previous statements, CEO Seamus Rocca indicated that heightened confidence in Bitcoin’s future was driving holders to borrow against their assets instead of selling, signifying a move from short-term speculation to more strategic, long-term planning.
The report reveals that though loan issuance diminished later in the year, existing loan balances grew, showing that borrowers preferred to keep loans accessible rather than utilizing them merely for immediate cash flow.
Rocca highlighted this trend as reflecting “disciplined, private-bank-style financial behavior,” with members viewing Bitcoin as a productive asset rather than a quick liquidity option, and loan activity is mostly concentrated in Europe and Latin America, which together generated 85% of the total loan volume, split as 56% from Europe and 29% from Latin America.
Members’ BTC holdings, per region, quarter-on-quarter. Source: Xapo Bank
