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.
FAQs
Credit & Liquidity
Access instant cash liquidity without selling your digital assets through flexible, secure Bitcoin-backed loans tailored to your financial needs.
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.
