Bitcoiners Keep the Faith during Market Turbulence

Xapo, the world’s first licensed bank that combines traditional banking with Bitcoin management, reports that member transaction volume surged by 800% this August. A primary driver? Members who see opportunity in volatility, using the crypto market downturn to grow their Bitcoin portfolios.

During August, Bitcoin prices dropped below the $55,000 mark, sparking what Xapo calls a “crypto liquidation frenzy,” where $1 billion was wiped from the market. 

Source: BNC Bitcoin Liquid Index

Yet, Xapo’s high net-worth members took an opposite tack: 80% of them chose to increase their Bitcoin holdings between July and September, suggesting they see dips as long-term growth opportunities rather than moments for panic-selling. This faith among members contrasts sharply with behavior seen during low-volatility periods when 60% of Bitcoin transactions on Xapo Bank lean towards selling rather than buying. In the August slump, however, 75% of all transactions were purchases—a testament to the enduring bullish sentiment among Bitcoin faithful.

In explaining this behavior, Seamus Rocca, CEO of Xapo Bank, highlighted Bitcoin’s unique role as a hedge against traditional financial turmoil, especially as elections and economic policies fuel uncertainty. “While the August crypto crash has been ostensibly blamed on the global mini-meltdown in the traditional markets, the direct effect on crypto has been largely contained,” Rocca noted. “The beauty of Bitcoin as an asset is its separation from any individual country’s monetary policy—a belief that Xapo Bank was founded on.” He added, “As the US, and by extension the global economy, enter the pointy end of the election season, and global outlooks seem more volatile and unpredictable, two things remain undeniable: Bitcoin stands as a hedge against currency debasement, and Bitcoin investors remain as bullish as ever.”

The interconnectedness of global financial markets is also becoming apparent. August’s cryptocurrency slump coincided with a crash in Japan’s stock market, underscoring a new reality where traditional and decentralized finance (DeFi) sectors appear increasingly intertwined. For Xapo’s members, however, this has only cemented their commitment to Bitcoin’s long-term potential. As Rocca underscores, Xapo’s platform is positioned not only as a storage or investment vehicle but as a way for users to put their Bitcoin assets to work, earning interest, making global payments, and accessing Bitcoin-backed debit solutions.

Xapo Bank, founded in 2013 and fully licensed under the Gibraltar Financial Services Commission, offers a variety of services that make Bitcoin a practical and accessible financial tool for a global customer base. Following the sale of its institutional custody business to Coinbase in 2019, Xapo pivoted to focus solely on retail clients. Today, it’s a digital-first bank enabling members to earn interest on Bitcoin, access USD-denominated savings, and manage funds with complete reserve backing—Xapo guarantees USD deposits up to the equivalent of €100,000 without lending any member assets.  

Source: Xapo

These features make Xapo a distinctly stable choice for Bitcoin holders who are unphased by the oscillations in global markets. By putting their trust in a bank that doesn’t lend assets and offers security and interest on deposits, Xapo’s members underscore the rise of Bitcoin as a viable alternative in an increasingly volatile financial world.