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Bitcoin-backed loans offer up to $1 million as confidence grows

Bitcoin-backed loans offer up to $1 million as confidence grows

GrafaGrafa2025/05/08 04:10
By:Mahathir Bayena

Xapo Bank CEO Seamus Rocca highlighted growing investor confidence in borrowing against Bitcoin (CRYPTO:BTC) as the market stabilises near $95,000 to $97,000.

Speaking at the Token2049 event in Dubai, Rocca explained that the shift from short-term speculation to long-term investment has made Bitcoin-backed loans a logical development.

“I’m not sure that confidence would have been there three or four years ago. But today, people are more comfortable to borrow against Bitcoin because we’re nowhere near the levels that would trigger liquidation,” Rocca said.

On March 18, Xapo Bank introduced a lending product allowing qualified clients to borrow US dollars using Bitcoin as collateral, with loans up to $1 million.

The product offers loan-to-value (LTV) ratios of 20%, 30%, and 40%, providing flexibility while managing risk.

“If you get a 20% LTV loan and you have 100 Bitcoin, as a lot of early adopters do, that’s still a couple of million dollars you can borrow without having to sell them,” Rocca noted.

With conservative LTVs, Bitcoin prices would need to fall below $40,000 to trigger liquidation, a scenario Rocca says is unlikely given current market stability.

He also emphasised that borrowing against Bitcoin helps investors avoid selling assets during emergencies.

“The smart thing to do would be not to sell it in three days if it goes to $100,000. But life gets in the way,” Rocca said.

Unexpected expenses such as medical bills or car repairs often force asset liquidation at unfavorable times.

Borrowing allows holders to maintain exposure to Bitcoin’s potential price appreciation while accessing needed liquidity.

“You continue to have the upside potential of the price appreciation of the Bitcoin because you haven’t sold it. With institutional adoption deepening and the Bitcoin market maturing, more long-term holders are expected to use crypto liquidity without selling their BTC,” Rocca explained.

At the time of reporting, the Bitcoin (BTC) price was $98,693.26.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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