Unlock USD liquidity without selling your Bitcoin. Xapo Bank lends up to 40% of your BTC's value while your coins stay segregated and never rehypothecated.
Why Consider a Bitcoin-Backed Loan?
When you hold Bitcoin as a long-term investment, selling it for short-term liquidity needs can be counterproductive. Here's why a Bitcoin-backed loan might be the smarter option:
Keep your upside: Maintain your Bitcoin exposure without triggering a taxable sale or missing future market rallies
Instant liquidity: Access fiat currency to your Xapo USD account or debit card without wire-transfer delays Tax efficiency: Loan proceeds typically aren't considered a taxable event (though you should verify with your local tax advisor)
Flexible repayment: Repay at any time - just the principal plus accrued interest unlocks your BTC, with no penalties for early repayment
Cost-effective: Borrowing at Xapo's rates (currently 8-12% APR) can be more economical than paying capital-gains tax or losing opportunity cost
Rehypothecation — The Hidden Risk Other Lenders Don't Want You to Know About
The most important factor when choosing a Bitcoin lender isn't the interest rate — it's whether your Bitcoin is truly safe.
One crucial aspect many lending platforms don't highlight is rehypothecation - where the lender re-lends, pledges, or pools your BTC collateral while your loan is active. This practice creates substantial risk: if the platform (or its borrower) defaults, you're just another creditor in line instead of being able to immediately reclaim your assets.
Xapo Bank's Non-Rehypothecated Vault Architecture
Xapo Bank takes Bitcoin security to unprecedented levels with:
Non-rehypothecation guarantee: Your Bitcoin collateral is never re-lent or pledged, it remains securely held in the vault until your loan is repaid
Segregated custody: Your Bitcoin is kept separate from Xapo's corporate assets, ensuring clear ownership and protection
Multi-party computation (MPC) technology: Your deposit is protected by a decentralized MPC system that splits the master private key into encrypted "shards" distributed across undisclosed global locations
Military-grade protection: Key shards and encrypted data are stored in bomb-proof, air-gapped structures, protected by armed guards and security professionals
Continuous security monitoring: Comprehensive controls constantly monitored to protect against threats
Factors to Consider When Choosing a Bitcoin Lender
Security vs. Rates: Lower APRs often come with rehypothecation risk
Custody Model: In-house specialized vaults vs. third-party solutions
LTV Ratio: Higher LTV means greater liquidation risk during market volatility
Regional Availability: Check if service is available in your country
Loan Terms: Consider flexibility in repayment and tenor options
Additional Fees: Some providers may have hidden fees
Note: Always verify current terms and conditions directly with providers as policies may change, particularly regarding rehypothecation practices.
Who Chooses Xapo's Bitcoin-Backed Loan?
Long-term Bitcoin holders who value custody security over small rate differences
Entrepreneurs and investors needing temporary fiat liquidity for deals, taxes, or real-estate bridges
Family offices and trusts with legal and operational requirements for asset segregation
Getting Started
Apply for Xapo Bank Membership (online KYC takes approximately 15 minutes)
Deposit BTC into your personal vault address
Calculate your borrowing limit and request a loan through the Xapo Bank app
Select your preferred loan duration (30, 90, 180, or 365 days)
Sign digital loan agreement; funds appear instantly in your USD account
Monitor your loan health in real-time through the app
Repay at any time with no penalties; your BTC unlocks automatically
Xapo's Bitcoin-backed loans are available to pre-approved members based on their Bitcoin holdings and duration. The service is available to clients globally (except for UK residents, US residents and OFAC-sanctioned countries).
Questions? Your dedicated private banker is available 24/7.
