Why We Invested in Xverse: A Bitcoin Account Where You Keep the Keys

Draper Dragon and its Orion Fund has invested in Xverse, the self-custodial Bitcoin neobank. The strategic round was led by Draper Associates, with Trust Machines also participating.

For most of Bitcoin's history, holders have had two options. They could keep their coins in their own wallet, where the coins were safe, but did nothing. Or they could hand them to an exchange or lender to earn yield, borrow or spend, and trust that company with the keys. As Bitcoin DeFi has matured, more of what those companies offered can now run on-chain. The missing piece has been an app that regular people find easy enough to use every day.

Xverse is building that app. In one place, holders can store their bitcoin, earn on it and on their stablecoins, lock bitcoin as collateral to borrow USDC without selling, and send and receive money over Lightning. Every transaction is signed from the user's own device, and Xverse never holds their funds.

Two things convinced us to invest.

The first is that the product meets people where they already are. Since launching in 2021, Xverse has grown into an app with more than two million downloads. Adding savings, lending and payments on top of a wallet people already trust is a much shorter path than asking them to try something new.

The second is the self-custody model. Xverse plugs into protocols across the Bitcoin, and UTXO ecosystems, while the keys stay with the user the whole time. Holders get the features they used to need an exchange for, and they never give up control of their bitcoin.

Our focus has long been on Bitcoin and the wider UTXO ecosystem, and we believe the next level of adoption needs to be seamless and start at the consumer level. Xverse is one of the leading Bitcoin wallets and is building exactly that, starting with Bitcoin. Over time, we believe the UTXO ecosystems can come together, and apps like Xverse are where that will happen for users.

"Everything in crypto converges to Bitcoin, and I've spent years funding the infrastructure that gets it there," said Tim Draper, founding partner of Draper Associates and founder of Draper Dragon, in Xverse's announcement. "Xverse is building the Bitcoin money app. This is what replaces the bank for regular people."

Learn more about Xverse here.