Bitcoin News Today: Xapo's Enhanced Bitcoin Fund Signals Growing Institutional Confidence in Digital Assets

Xapo Bank Broadens Its Bitcoin Credit Fund Amid Surging Institutional Demand

Xapo Bank has announced the expansion of its Bitcoin credit fund after members allocated $100 million during its initial launch, reflecting a rising appetite among institutions for Bitcoin-based financial solutions.

Introduced in 2024 through a collaboration with Hilbert Group, the Xapo Byzantine BTC Credit Fund utilizes a comprehensive institutional lending framework. This approach allows the fund to lend out deposited Bitcoin, enabling long-term holders to earn returns while minimizing risk exposure. According to Tommy Doyle, Xapo Bank’s global head of relationship management, the fund enhances the company’s portfolio of Bitcoin-focused wealth products by providing clients with steady yields and a conservative risk profile.

Hilbert Capital’s investment committee is responsible for managing lending decisions within the fund, positioning it as a savings vehicle rooted in Bitcoin. While Xapo has previously offered sizable Bitcoin-backed loans in U.S. dollars, this credit fund marks a strategic move toward generating institutional-grade returns. The fund’s growth comes as the Bitcoin lending industry rebounds from the setbacks of 2022, when firms like BlockFi and Celsius collapsed. Since then, both decentralized lenders such as Aave and centralized providers like Ledn have helped restore trust in the sector. Xapo’s adherence to regulatory standards in Gibraltar and the Cayman Islands has further attracted institutional investors.

This expansion aligns with a broader movement toward institutional adoption of digital assets. Recent developments include Texas investing $5 million in BlackRock’s Bitcoin ETF and Abu Dhabi authorizing Ripple’s RLUSD stablecoin for institutional use. Unlike products that rely on ETFs or stablecoins, Xapo’s fund directly utilizes Bitcoin, setting it apart in the market. Participation in the fund is limited to qualified lenders who meet specific criteria, including minimum investment thresholds and thorough due diligence, ensuring alignment with the fund’s risk management policies.

As the Bitcoin ecosystem matures, Xapo’s initiative highlights the asset’s growing acceptance as credible collateral. The company’s regulatory compliance in Gibraltar and the Cayman Islands, combined with Hilbert Group’s institutional expertise, positions the fund as a strong competitor to traditional wealth management offerings. With more entities like Texas allocating resources to Bitcoin, Xapo’s fund exemplifies the increasing convergence of institutional finance and digital assets.