Draper Associates invests in Bitcoin neobank Xverse

Draper Associates has joined Xverse’s roster of investors, backing the Bitcoin neobank as it seeks to expand its onchain financial services. Xverse, originally a self-custodial Bitcoin wallet, now offers yield, borrowing, and payment features, positioning itself as a Bitcoin-focused neobank. The company, developed by Secret Key Labs in Hong Kong, serves nearly 2 million users and operates across iOS, Android, and Chrome extensions.

Xverse’s core features include earning yield through staking protocols like Stacks, borrowing stablecoins such as USDC using Bitcoin as collateral, and enabling stablecoin payments across Bitcoin’s base layer and Layer 2 networks like Stacks, Starknet, and Spark. The platform emphasizes self-custody, ensuring users retain control of their private keys without intermediaries or account freezes.

This investment marks another funding milestone for Xverse, which previously raised $5 million in a seed round led by Jump Crypto in August 2023. With Draper Associates’ support, Xverse aims to further develop its onchain services, leveraging Bitcoin Layer 2 infrastructure to provide users with greater financial control and flexibility.

The move comes as Bitcoin holders increasingly seek ways to utilize their assets without compromising self-custody. However, risks such as smart contract vulnerabilities, collateral risk, and reliance on developing Layer 2 networks remain. Xverse’s success will depend on user adoption, stablecoin payment integration, and the mainstream acceptance of borrowing against Bitcoin.