Bitcoin-Backed Loans Are the Next Logical Step, Says Xapo Bank CEO

With Bitcoin trading steadily between $95,000 and $97,000, confidence in the crypto market is fueling a new trend: borrowing against Bitcoin instead of selling it. Seamus Rocca, CEO of the Gibraltar-based Xapo Bank, believes Bitcoin-backed loans are the “obvious” next step as investor sentiment shifts toward long-term holding and institutional adoption accelerates.

Speaking at a recent industry event in Dubai, Rocca highlighted how investor attitudes have matured compared to just a few years ago. “I’m not sure that confidence would have been there three or four years ago,” he noted. “But today, people are more comfortable to borrow against Bitcoin because we’re nowhere near the levels that would trigger liquidation.”

In March, Xapo Bank introduced a lending product that allows qualified clients to borrow up to $1 million in U.S. dollars using their Bitcoin as collateral. The offering comes with conservative loan-to-value (LTV) ratios—20%, 30%, and 40%—providing borrowers with flexible options while minimizing risk.

Rocca pointed out that with a 20% LTV ratio, Bitcoin would need to plummet below $40,000 to trigger liquidations. “We’re nowhere near $40,000,” he said, underscoring the current price stability as a major factor behind rising borrower confidence.

The initiative aims to serve long-term holders who want to maintain their BTC exposure while accessing liquidity for life's unexpected expenses—such as medical bills, emergencies, or major purchases. Instead of selling their Bitcoin and potentially missing out on future gains, holders can now borrow and simply pay interest, keeping their assets intact.

“If you follow the ethos of investing, the smart thing to do would be not to sell it in three days if it goes to $100,000,” Rocca explained. “But life gets in the way.”

As the Bitcoin market matures and institutional interest deepens, Rocca envisions a future where using crypto as collateral becomes standard practice for savvy investors. This represents a shift from the traditional “hodl” mentality to a more dynamic, utility-focused approach to managing digital wealth.