Wealthy bitcoin holders are increasingly using their coins as collateral, seeking income from their holdings and relying on specialized banking services rather than treating the asset solely as a trading instrument, Xapo Bank CEO Seamus Rocca said in an interview published Oct. Customers at the Gibraltar-based bank are seeking cash without selling bitcoin, placing some holdings into income-generating products and receiving bitcoin interest on dollar savings. Rocca said funds and family offices are showing demand for products designed to support both accumulation and income.
Xapo charges a $1,000 annual membership fee for services that combine dollar banking, bitcoin custody, investments and borrowing. The bank’s current offering advertises a variable 4. 1% annual rate on dollar savings, paid in bitcoin, while eligible new members can receive a temporary 4. 6% rate on the first $100,000 of qualifying balances for 90 days. Interest rates are variable, and the promotional terms say payments are converted and credited in bitcoin. Xapo’s product materials also describe bitcoin-backed lines of credit that allow customers to access cash while retaining their holdings, with an illustrative borrowing level based on a 40% loan-to-value ratio.
Rocca said customers’ experiences through earlier bitcoin rallies and downturns have divided them into different groups. Some early adopters have become more willing to take profits after seeing gains disappear in previous declines, while investors who entered around 2018 and 2019 are more likely to hold their coins and borrow when they need liquidity.
Rocca described the shift as evidence that bitcoin holders increasingly want private-bank-style services built around existing wealth. He said traditional banks are acknowledging demand for bitcoin custody and investment products but remain slower to offer borrowing or direct management services because of internal approvals, perceived risk and regulatory uncertainty. He also argued that some exchange-traded-fund participation reflects arbitrage rather than long-term corporate treasury allocations, and said the institutional cycle had been called too early. In his view, lower geopolitical and regulatory uncertainty could help unlock longer-term institutional allocations and potentially lift bitcoin to $250,000 over the next two to three years, although that is a forecast rather than an established outcome. Xapo’s own customers remain divided in the near term, with some buying because they think the market has bottomed and others holding dollars while expecting further declines and earning bitcoin interest.