Bitcoin-backed lending is gaining traction as an alternative to selling assets during times of need. Instead of liquidating holdings, users can use BTC as collateral to access cash—maintaining exposure while unlocking liquidity for expenses or opportunities.

Xapo Bank offers this model by allowing eligible users to borrow up to 40% of their Bitcoin’s value, with flexible repayment options and no early repayment penalties. Importantly, the platform emphasizes a conservative approach, including segregated collateral and no rehypothecation—addressing risks that previously led to failures in the crypto lending sector.