Credit & Liquidity

You can use your Bitcoin wealth as collateral to secure a US Dollar line of credit through Xapo. This allows you to access immediate cash liquidity while maintaining full ownership of your digital assets, ensuring you do not miss out on potential future price appreciation. Simply allocate a portion of your Bitcoin as collateral, and cash is made available in your USD account.

The Loan-to-Value (LTV), or collateral ratio, is a percentage that shows the size of your loan compared to the current market value of the Bitcoin you have provided as collateral.

For example, a 40% LTV means your loan amount equals 40% of the value of your pledged Bitcoin. Because the market price of Bitcoin fluctuates, your LTV will naturally change over time. If the value of your Bitcoin drops, your LTV rises. If the LTV reaches a certain threshold, you may be required to add more Bitcoin as collateral to maintain the health of your loan and prevent your assets from being liquidated.

The interest rate is variable (meaning it can change daily) and is based on the current base rates set by the Federal Reserve Bank of New York.

You do not lock in a fixed rate. The interest you owe is calculated daily based on the rate active that day. While the rate can change every day, in practice, it usually shifts only when the Federal Reserve revisits its base rates.

A loan that uses Bitcoin is a fast, simple way to get cash by using your Bitcoin as security (collateral), not by selling it. Think of it as a version of a secured loan, but instead of using your house or car as security, you use your digital wealth.

You can borrow up to 40% of the value of the Bitcoin that you provide as security. This amount is based on our 'borrowing ratio' of 40%. This means if you have Bitcoin worth USD $100,000, you can borrow up to USD $40,000.

Xapo Bank offers a secure, flexible way to access cash without selling your Bitcoin. Members can borrow US Dollars using their Bitcoin holdings as collateral, with proceeds credited instantly to their Xapo Bank US Dollar account. The loans feature competitive Annual Percentage Rates (APR), flexible repayment terms, and no hidden fees or early repayment penalties. Crucially, your Bitcoin remains securely stored in our vaults and is never lent out or rehypothecated while the loan is active.

If the market price of Bitcoin falls, your Loan-to-Value (LTV) ratio, or borrowing ratio, will naturally increase. If it approaches a 65% threshold, you will receive a margin call notification, prompting you to either deposit more Bitcoin as collateral or repay a portion of the loan. If the LTV reaches 80% your collateral will be automatically liquidated to cover the outstanding balance.

No, there are no hidden fees or early repayment penalties associated with our Bitcoin-backed loans. You have the complete flexibility to repay your loan in full or in part at any time before the end of your agreed term. You will only pay interest for the exact number of days you held the borrowed funds, making it a highly efficient tool for managing short-term cash flow.

You can access the cash instantly. Because your loan is fully secured by the Bitcoin you already hold within the Xapo Bank ecosystem, there is no need for a lengthy approval process or traditional credit checks. Once you accept the terms and allocate your collateral in the app, the US Dollars are immediately deposited into your account, ready to be spent or transferred.

As soon as you fully repay the borrowed US Dollar amount along with any accrued interest, your Bitcoin collateral is instantly released. The assets are immediately unlocked in your BTC Vault balance, restoring your full ability to hold, trade, or transfer them as you see fit.