Xapo Bank, heritage manager for long -term Bitcoin holders, said it offers its members backed by BTC of up to $ 1 million.
Cryptographic loans became a kind of Bête noire In recent years after a series of high profile collapses and bankruptcies that shook the cryptographic industry. But loans supported by cryptocurrencies are now returning, with companies such as Exchange Coinbase (Moin) that replicate loans backed by Bitcoin in January after removing the service in 2023.
The Xapo CEO, Seamus Rocca, emphasizes the difference between the company’s heritage management service and what exchanges generally offers, which is oriented to trade.
“If an exchange offers you insured loans, it is to encourage leverage,” Rocca said in an interview. “And at the time he has leverage, unless he is a professional investor, and even when he is a professional investor, the risk of losing money is very high.
A conservative relationship of 20% -40% of loan at safe value The bitcoin of the clients, said Xapo, whose bank license regulated by Gibraltar has been passed into the United Kingdom in effect, this means that Bitcoin would have to crash for less than $ 40,000 of its current price so that the borrowers are settled, Rocca said.
Xapo began in 2013 as a wallet and custodian known for ensuring Bitcoin in Mountain Swiss Bunkers, a very safe alternative to Autocustody for long -term headlines of the largest cryptocurrency. Ethher (ETH) was recently added.
When the company began to test the water for loans backed by Bitcoin, the average loan size was supposed to be around $ 50,000. It was soon clear that long -term headlines would like more: those with the necessary $ 5 million Bitcoin guarantee were looking for loans of $ 1 million. Xapo can organize even bigger loans case by case. The interest rate of the dollar is around 10%, Rocca said.
The main reasons why someone may want to take a loan is to buy or update a property, buy a new car, followed by other diverse needs.
“If you are a head of Bitcoin and you have conviction that Bitcoin’s price will rise, selling any of them is difficult to do,” Rocca said. “But sometimes life gets along the way: you want to update your kitchen, you have to pay school rates.
Xapo offers reimbursement programs of 30, 90, 180 or 365 days, without penalties for early reimbursement, while a loan health tracker provides real -time information about the state of loans and potential risks, the company said in a press release.
