Xapo Bank Sees 14.2% Bitcoin Trading Volume Surge Despite 13% Price Drop

Xapo Bank, a Gibraltar-based private bank and Bitcoin custodian, reported a significant surge in Bitcoin trading volumes during the first quarter of 2025. This increase was driven by high-net-worth members who actively purchased Bitcoin during market declines, demonstrating their long-term confidence in the cryptocurrency. The bank noted that the first quarter of 2025 saw a 14.2% growth in trading volume compared to the previous quarter, despite Bitcoin's price drop of 13% during the same period. This trend reflects the members' commitment to Bitcoin's long-term potential, even amidst short-term volatility.

The bank's data also revealed a 50% quarter-on-quarter jump in euro deposits, which the bank attributed to growing concerns about the future of US dollar primacy and the threat of a US recession. Additionally, there were notable shifts in stablecoin deposit patterns, with USDC deposits increasing by 19.8% and Tether (USDT) deposits decreasing by 13.4%. This shift is likely due to European cryptocurrency exchanges delisting Tether to comply with regulatory requirements.

Gadi Chait, Xapo Bank’s head of investment, emphasized that despite short-term headwinds, the overall outlook for Bitcoin remains strong. He stated that the bank's member data shows that current volatility does not diminish Bitcoin's importance. Chait further noted that the opportunity for Bitcoin lies in its long-term performance rather than its short-term volatility.

Xapo Bank's initiatives in 2025, including the launch of interest-bearing Bitcoin and fiat banking accounts in the UK and Bitcoin-backed USD loans of up to $1 million, have further solidified its position as a crypto-friendly institution. The bank's self-selected poll on X also indicated that respondents favored using Bitcoin for savings and investment, underscoring the growing acceptance of Bitcoin as a viable financial asset.

The bank's observations align with broader market trends, where wealthy investors are increasingly viewing Bitcoin as a hedge against economic uncertainty and a store of value. This trend is likely to continue as more investors recognize the potential of Bitcoin in the long term, despite short-term market fluctuations.