Key Takeaways
- • Xapo Bank CEO Seamus Rocca told CoinDesk that wealthy bitcoin holders are increasingly using their BTC as collateral for loans and as a source of income, shifting from speculative trading toward private banking services.
- • According to Rocca, about 45% of Xapo customers use the feature that pays interest in bitcoin on dollar savings, allowing profit-takers to rebuild BTC holdings while holding cash.
- • Xapo advertises a variable base rate of 4.1% on dollar savings paid in bitcoin, a temporary 4.6% introductory rate for eligible new members, and a separate bitcoin credit fund targeting annual returns of up to 4%.
- • Rocca argued that slow-moving traditional banks, constrained by committee approvals and political and regulatory uncertainty, leave an opening for specialist providers like Xapo Bank.
- • Rocca said bitcoin could reach $250,000 over the next two to three years if geopolitical and regulatory uncertainty declines and institutions make long-term allocations.
Summary
Wealthy bitcoin holders are increasingly treating their cryptocurrency as an asset to borrow against and generate income from, a shift away from speculation toward private banking, according to Xapo Bank CEO Seamus Rocca, speaking to CoinDesk. At the Gibraltar-based bank, customers are seeking cash without selling their bitcoin, placing holdings into income-generating investments, or accumulating more BTC through interest on dollar savings. Rocca said the demand comes from funds and family offices seeking accumulation and income products, and described the current cycle's theme as "yield, accumulation, income generation."
Rocca said experience from previous market cycles has divided Xapo's customer base. Some early adopters have taken profits as bitcoin reached record prices, having seen gains evaporate in earlier downturns. Others, including investors who entered around 2018 and 2019, prefer to hold and borrow against their coins for liquidity. Profit-takers often keep proceeds in dollar savings and receive interest in BTC, rebuilding holdings gradually. Rocca said about 45% of Xapo customers use that feature. Xapo advertises a variable base rate of 4.1% on dollar savings paid in bitcoin, alongside a temporary 4.6% introductory rate for eligible new members. The bank also offers a separate bitcoin credit fund targeting annual returns of up to 4% through lending, which carries credit and counterparty risk. Borrowing lets customers keep exposure to future bitcoin gains, though they remain exposed to price declines while carrying debt. The bank charges an annual membership fee of $1,000 for dollar banking alongside custody, investment and borrowing access.
Rocca said traditional banks increasingly acknowledge client demand for bitcoin exposure, a marked change from the skepticism he encountered when he began working in crypto in 2016. He characterized large banks as slow, citing committee approval requirements and employee reluctance to champion products seen as risky. Banks that previously feared repercussions from serving crypto businesses want assurance that a more accommodating environment will last. As a result, some institutions offer investment products but stop short of services that let clients borrow against or directly manage bitcoin wealth. "Them being slow is a good opportunity for firms like Xapo Bank," Rocca said. He also argued that another failure among poorly managed crypto businesses could damage confidence in bitcoin itself.
Rocca expects bitcoin's next growth phase to depend on institutions making long-term allocations, arguing that ETF participation has largely involved arbitrage strategies, unlike a corporate treasurer allocating company assets to bitcoin. He said reduced geopolitical and regulatory uncertainty could unlock those allocations and potentially push bitcoin to $250,000 over the next two to three years, in his view. Xapo's customers are divided on the near-term outlook: some are buying because they believe the market has bottomed, while others are holding dollars expecting further declines and earning bitcoin interest.
Rocca said experience from previous market cycles has divided Xapo's customer base. Some early adopters have taken profits as bitcoin reached record prices, having seen gains evaporate in earlier downturns. Others, including investors who entered around 2018 and 2019, prefer to hold and borrow against their coins for liquidity. Profit-takers often keep proceeds in dollar savings and receive interest in BTC, rebuilding holdings gradually. Rocca said about 45% of Xapo customers use that feature. Xapo advertises a variable base rate of 4.1% on dollar savings paid in bitcoin, alongside a temporary 4.6% introductory rate for eligible new members. The bank also offers a separate bitcoin credit fund targeting annual returns of up to 4% through lending, which carries credit and counterparty risk. Borrowing lets customers keep exposure to future bitcoin gains, though they remain exposed to price declines while carrying debt. The bank charges an annual membership fee of $1,000 for dollar banking alongside custody, investment and borrowing access.
Rocca said traditional banks increasingly acknowledge client demand for bitcoin exposure, a marked change from the skepticism he encountered when he began working in crypto in 2016. He characterized large banks as slow, citing committee approval requirements and employee reluctance to champion products seen as risky. Banks that previously feared repercussions from serving crypto businesses want assurance that a more accommodating environment will last. As a result, some institutions offer investment products but stop short of services that let clients borrow against or directly manage bitcoin wealth. "Them being slow is a good opportunity for firms like Xapo Bank," Rocca said. He also argued that another failure among poorly managed crypto businesses could damage confidence in bitcoin itself.
Rocca expects bitcoin's next growth phase to depend on institutions making long-term allocations, arguing that ETF participation has largely involved arbitrage strategies, unlike a corporate treasurer allocating company assets to bitcoin. He said reduced geopolitical and regulatory uncertainty could unlock those allocations and potentially push bitcoin to $250,000 over the next two to three years, in his view. Xapo's customers are divided on the near-term outlook: some are buying because they believe the market has bottomed, while others are holding dollars expecting further declines and earning bitcoin interest.
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