Draper Associates invests in Xverse's Bitcoin neobank for self-custody services

Draper Associates has added Xverse to its portfolio, backing the Bitcoin neobank that aims to serve nearly 2 million users. Xverse, developed by Hong Kong-based Secret Key Labs and led by CEO Ken Liao, offers a self-custodial Bitcoin wallet with additional neobank features. These include earning onchain yield through staking protocols like Stacks, borrowing stablecoins such as USDC against Bitcoin collateral, and making stablecoin payments across Bitcoin's base layer and Layer 2 networks, including Stacks, Starknet, and Spark. The platform ensures private keys remain on user devices, eliminating intermediaries and account freezes.

This investment marks another milestone for Xverse, which previously raised $5 million in a seed round led by Jump Crypto in August 2023, with Franklin Templeton among the backers. As of mid-2026, the company's total funding is estimated between $9 million and $12 million. Draper Associates' backing underscores growing confidence in self-custodial banking, positioning it as a mainstream financial habit.

The appeal of Xverse lies in its ability to combine self-custody with financial services, a feature that has historically required users to choose between cold storage and custodial solutions. However, challenges remain, including the responsibility of self-custody, where users must manage their own keys without customer support. Additionally, onchain yield and borrowing come with smart contract and collateral risks, and a sharp drop in Bitcoin's price could strain borrowers' positions. The Layer 2 networks Xverse relies on are still in development, adding another layer of uncertainty.