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

Xapo Bank, a Gibraltar-based institution, reported a 14.2% increase in Bitcoin trading volume during the first quarter of 2025 compared to the previous quarter. This growth occurred despite Bitcoin experiencing a 13% price decline, marking its worst start to a year since 2018. The bank's high-net-worth clients actively engaged in "buying the dip," demonstrating their commitment to Bitcoin's long-term potential rather than focusing on short-term price volatility.

Xapo Bank has been at the forefront of integrating cryptocurrency services within a traditional banking framework. Earlier this year, it became the first licensed bank to offer interest-bearing Bitcoin and fiat banking accounts in the UK. Additionally, in March 2025, the bank introduced Bitcoin-backed USD loans of up to $1 million, further expanding its crypto-friendly service offerings.

The first quarter also saw a significant shift in deposit patterns at Xapo Bank. Euro deposits jumped by 50% compared to the previous quarter, driven by concerns about US dollar stability and recession fears. This trend reflects a broader market sentiment as investors sought alternatives to the US dollar amidst economic uncertainties.

Stablecoin deposit patterns also showed notable changes. USDC deposits increased by 19.8% in Q1 compared to Q4 2024, while Tether (USDT) deposits decreased by 13.4%. This shift in stablecoin preferences comes as European cryptocurrency exchanges began delisting Tether to comply with the Markets in Crypto-Assets Regulation (MiCAR). Tether also withdrew its euro-backed stablecoin from the market during this period, further influencing deposit trends.

Xapo Bank is positioning itself to fill a market gap by offering cryptocurrency options within a traditional banking environment. The bank noted that fewer than 20% of European banks currently provide crypto services, highlighting an opportunity for growth and innovation in the sector.

The increase in trading activity was not limited to Xapo Bank. Cryptocurrency exchange Bitget also reported surging volumes in its Q1 2025 Transparency Report. Bitget’s total trading volume reached $2.1 trillion in the first quarter, with spot trading volume seeing a dramatic increase of 159% quarter-on-quarter, rising to $387 billion. The exchange added 4.89 million users to its centralized platform and 15 million users to its Bitget Wallet app during Q1, bringing its total global user count to over 120 million.

In February, Bitget demonstrated industry cooperation by loaning rival exchange Bybit 40,000 ETH, valued at approximately $100 million. This loan, provided without interest or collateral, helped Bybit recover from a major hack. The loan has since been fully repaid, with Bitget CEO Gracy Chen stating it was “simply about supporting a peer in need.”

Gadi Chait, Xapo Bank’s head of investment, emphasized that short-term market turbulence doesn’t diminish Bitcoin’s importance. He stated that “while global events painted an erratic picture, the opportunity for Bitcoin has always been in its long-term performance, not its short-term volatility.” Xapo Bank’s self-conducted poll on X showed that respondents primarily favor using Bitcoin for savings and investment purposes, further supporting the bank’s focus on Bitcoin as a long-term asset.

Bitget’s CEO indicated the exchange will continue focusing on institutional-grade infrastructure while expanding its Web3 presence through its ecosystem of products. Despite market volatility and regulatory changes affecting certain cryptocurrencies, the data from both Xapo Bank and Bitget suggests continued strong interest in crypto trading and investment, particularly among clients viewing Bitcoin as a long-term store of value rather than a short-term trading vehicle.