Xapo Bank is the newest in a string of economic institutions which have introduced Bitcoin-backed loans for its customers. That is one more good indication that the world is warming towards accepting cryptocurrency as a real asset.

A Bitcoin-backed loan provides access to US dollars without having to sell your $BTC. Because of this Xapo Bank customers can now borrow as much as 40% of their $BTC collateral for a maximum loan amount of $1M.

That’s with zero fees. Nonetheless, Xapo Bitcoin-backed loans are subject to eligibility and a variable rate of interest that’s linked to US Federal Reserve rates. And loans aren’t available to customers who reside within the UK or Australia.

In keeping with the bank, the loan can be accessible inside a minute of being approved and might be used via debit cards, bank, or crypto transfers. There’s no set schedule for repayments nor penalties for early repayments. But loans should be repaid inside the agreed-upon 30, 90, 180, or 12 months.

Is the Xapo Loan an Indication of Improved Market Sentiment?

It could well be. In truth, an HTF Market Intelligence report expects the $8.58B global Bitcoin loan market to grow at a CAGR of 26.4%. At that rate, the market can be value $45.27B by 2029. And Xapo Bank isn’t the primary institution to supply Bitcoin-backed loans.

Coinbase, for example, introduced Bitcoin-backed loans in November 2021. Amid the 2023 market downturn, nevertheless, Coinbase stopped issuing them, citing changing customer demands.

Nonetheless, across the time of $BTC’s all-time high price of $109, Coinbase reintroduced Bitcoin-backed loans. The CEX now offers $USDC loans powered by Morpho, which is an open-source lending protocol on Base – Coinbase’s Layer 2 blockchain.

Coinbase has also hinted at adding a few of the best altcoins to its loan offering. Nonetheless, the jury remains to be out on whether that might include leading meme coins.

In all, the indisputable fact that banks and exchanges are offering Bitcoin-backed loans reflects a positive market sentiment by way of Bitcoin and a world acceptance of $BTC as a legitimate asset.

Do Bitcoin-Backed Loans Mean Using a Custodial Wallet?

Yes. You want to be a Xapo Bank customer, and which means using the corporate’s wallet.

In truth, this Gibraltar-based bank was established in 2013 as a custodial Bitcoin wallet. It has since evolved right into a licensed digital banking group. Its wallet remains to be custodial, though. In other words, Xapo Bank customers’ wallets are regulated by the bank.

That’s not necessarily a nasty thing. It means the wallet has bank-grade protection. At the tip of the day, though, it’s higher to have your personal non-custodial wallet, like the Best Wallet app, for complete ownership of your private keys.

The exchange or bank behind a custodial wallet holds your private keys on its server, making your private keys vulnerable to data breaches, meaning your crypto could find yourself within the unsuitable hands.

Don’t forget hackers love attacking crypto banks and exchanges, as ByBit will inform you — and a recent Chainanalysis report notes that ‘Private key compromises accounted for the most important share of stolen crypto in 2024, at 44%.’

Here’s one other thing to consider. In case you take out a Bitcoin-backed loan from Xapo Bank, you won’t have the option to access the $BTC you used as collateral. It’ll be held within the bank’s Bitcoin Vault until your loan is fully repaid.

How the Best Wallet Token ($BEST) Ups the Ante

The Best Wallet app is a completely self-custodial, no KYC, multi-chain, multi-currency wallet. It’s also the one crypto wallet that enables you to buy the best presale tokens. And now, in a move to capture 40% of the explosive crypto wallet market by end-2026, it has launched its native Best Wallet Token ($BEST).

Analysts forecast that the crypto wallet market will expand at a 24.8% CAGR by 2032. With the final trend leaning towards software wallets, Best Wallet plans to dominate the market. And it should use the Best Wallet Token to finish its mission.

This top non-custodial wallet appears to be well on course to reaching its goal with its 50% monthly user growth rate.

The $BEST token presale can also be proving highly successful. After raising $160K inside 24 hours of the presale launch, the whole kitty now stands at $11M+. In the intervening time, 1 $BEST costs just $0.0244.

But as with all investment, we urge you to DYOR. The Best Wallet Token whitepaper is a superb place to begin. And in the event you determine that $BEST is best for you, we recommend reading our full guide to purchasing the Best Wallet Token.

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