Xapo Bank Data Reveals Bitcoin-Backed Loans Tilt Toward Long-Term

Bitcoin (CRYPTO: BTC)-backed borrowing at the Gibraltar-based Xapo Bank is increasingly being used for long-term financial planning rather than short-term liquidity, according to the bank’s 2025 Digital Wealth Report. Shared with Cointelegraph, the study reveals that 52% of Bitcoin-backed loans issued in 2025 carried a 365-day term, underscoring a shift toward durable liquidity strategies among wealthy clients. While new loan origination slowed as the year progressed, the outstanding balances kept rising, suggesting that borrowers preferred to keep their debt open rather than cashing out their Bitcoin positions. The bank’s client base consists largely of high-net-worth individuals and private clients who aim to optimize wealth preservation through structured collateralized finance.

The report argues that the trend reflects a broader pattern: Bitcoiners with a sizable stake are using the cryptocurrency as productive collateral to unlock liquidity without selling assets. “Long-term Bitcoiners, many of whom are now holding the majority of their wealth in Bitcoin, finally felt comfortable taking some profit,” the report stated. “At the same time, the underlying conviction didn’t waver. Most of our long-term members continued to hold the bulk of their Bitcoin through periods of heavy market movement.”

The data reflects the bank’s first calendar year operating its lending product that allows qualified clients to borrow USD against their Bitcoin holdings. It signals how Bitcoin is being used inside regulated banking rails as collateral integrated into longer-term financial planning.

From launch narrative to observed behavior

Xapo launched its Bitcoin-backed USD loans on March 18, 2025, targeting long-term Bitcoin holders seeking liquidity without selling their assets.

At the time, the bank described the product as a conservative alternative to earlier crypto lending models, offering loan terms up to 365 days and relatively low loan-to-value ratios.

Xapo Bank CEO Seamus Rocca previously told Cointelegraph that growing confidence in Bitcoin’s long-term outlook was encouraging holders to borrow rather than liquidate their positions, signaling a shift away from short-term speculation toward longer-term thinking.

The 2025 report suggests that expectation has materialized: while loan issuance moderated later in the year, outstanding loan balances continued to grow, indicating that borrowers were keeping loans open rather than using them for short-term liquidity tools.

Rocca said in the report that the pattern reflects “disciplined, private-bank-style financial behaviour,” with members using Bitcoin as productive capital rather than a short-term liquidity tool.

Loan volumes are concentrated in regions such as Europe and Latin America. According to Xapo Bank, those two regions accounted for 85% of total loan volume, at 56% and 29% respectively.

Why it matters

The emergence of Bitcoin-backed loans geared toward long-horizon financial planning marks a notable shift in how wealth is managed within regulated financial rails. For high-net-worth clients, these products offer a way to access USD liquidity without fully exiting a price-discounted or recovering market exposure, which can be critical during periods of volatility or strategic rebalancing. The data indicate that borrowers are treating Bitcoin not merely as a speculative asset but as a productive capital instrument that can unlock liquidity for investments, estate planning, or business needs while preserving exposure to potential upside.

From an industry perspective, the trend signals that crypto credit facilities are maturing beyond impulse-driven use cases. Lenders like Xapo Bank are leaning into longer tenors and controlled loan-to-value structures, which reduces liquidation pressure and aligns crypto-finance with traditional private-banking standards. This evolution may influence how other regulated or semi-regulated lenders approach crypto collateral, potentially encouraging more institutions to explore asset-backed lending models with explicit long-term goals.

Market observers will watch whether this long-horizon approach broadens the pool of participants who consider Bitcoin a legitimate, productive asset within a diversified portfolio. If the pattern persists, it could support a more nuanced narrative about Bitcoin’s utility in wealth management—beyond price speculation to functional collateral in the context of regulated financial services.

What to watch next

• Updates on loan book composition by region as more data become available for 2026, especially in Europe and Latin America.
• Changes to loan-to-value ratios or term options as the product evolves, including potential longer tenors or new collateral terms.
• Regulatory developments in Gibraltar and related jurisdictions that could influence crypto-backed lending standards and capital requirements.
• Snapshots of borrower behavior in subsequent reporting periods to assess whether the balance growth trend continues alongside a moderation in new loan issuance.

Sources & verification

• Xapo Bank 2025 Digital Wealth Report, detailing term distributions and outstanding balances.
• Xapo Bank launch announcement for Bitcoin-backed USD loans on March 18, 2025.
• CEO Seamus Rocca’s discussions with Cointelegraph regarding Bitcoin’s long-term outlook and borrowing patterns.
• Regional loan-volume breakdown: Europe (56%) and Latin America (29%), totaling 85% of the loan book.
• Statements from the report about the shift from short-term liquidity needs to long-term, disciplined financial behavior among members.

Bitcoin-backed lending shifts toward long-term wealth planning

In its first full calendar year of operation, Xapo Bank’s Bitcoin-backed lending program appears to have achieved what its early narrative anticipated: a transition from opportunistic liquidity tapping to purposeful, long-horizon financial planning. The program, designed to give qualified clients the option to borrow dollars against their Bitcoin holdings, is being used not primarily as a bridge to cover immediate expenses, but as a strategic tool to manage liquidity while preserving upside exposure. The 365-day loan term, adopted as a standard, is a notable feature that aligns with conservative, private-bank-style risk management and reflects a belief among sophisticated holders that the asset’s long-term trajectory remains intact despite near-term volatility.

The 52% share of 2025 loans with a one-year tenor is not a trivial statistic. It indicates a willingness among long-horizon Bitcoin holders to plan around the asset’s price movements without forcing a sale at potentially unfavorable prices. Even as new loan originations cooled during the latter part of the year, borrowers kept their positions open—effectively turning the loan itself into a form of collateralized liquidity that does not require liquidation. The bank’s own language about “productive capital” rather than mere liquidity suggests that these loans are viewed as real, ongoing commitments within a diversified wealth-management strategy rather than emergency funding.

From the outset, Xapo’s product was pitched as a prudent alternative to earlier, riskier crypto-lending paradigms. The launch in March 2025, positioned to appeal to long-term holders seeking liquidity without selling their assets, embodied a cautious approach—one that emphasizes stability, regulatory context, and the intent to preserve exposure to Bitcoin’s upside potential. This stance has resonated with a subset of high-net-worth clients who had previously kept most of their wealth in Bitcoin and were now exploring ways to optimize liquidity without abandoning the asset that anchors their portfolios.

Regional concentration remains notable. Europe and Latin America together accounted for 85% of loan volume, split roughly with Europe at 56% and Latin America at 29%. This geographic skew may reflect factors such as client base composition, regulatory environments, and the openness of private banks to structured crypto-collateral products in those regions. It also underscores that the early adopter segment for regulated, Bitcoin-backed lending is currently situated outside the largest traditional crypto markets, signaling where data and product iterations could emerge next.

For investors and builders in the crypto-finance space, the Xapo case provides a blueprint for integrating digital assets into conventional financial rails without sacrificing the core tenets of risk management and capital preservation. It shows that the crypto economy can function within regulated frameworks while expanding the toolkit available to long-term holders. However, it also highlights the prudence required: the product rests on the premise that Bitcoin remains a durable, long-horizon store of value and that borrowers will continue to exercise discipline in managing leverage and exposure.

This article was originally published as Xapo Bank Data Reveals Bitcoin-Backed Loans Tilt Toward Long-Term on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.