Bitcoin at DeFi Lending: How the Ultra-Rich Finance Their Luxury Lifestyle

The ultra-wealthy continue to seek ways to preserve their substantial digital assets while enjoying their exclusive lifestyles. Today, instead of selling their Bitcoin or Ethereum to pay for their favorite lifestyle purchases—such as yacht upgrades, luxury ski trips to St. Moritz, or exclusive events at the Cannes Film Festival—many are turning to sophisticated DeFi lending platforms that offer flexible credit lines. According to a 2025 survey by Henley & Partners, the global population of crypto millionaires has reached 241,700, a remarkable 40% increase from the previous year. However, many of these new crypto-wealthy individuals face a problem: traditional banks are unsure how to handle their digital assets.

The Challenge of Traditional Banking for Crypto-Rich Investors

Imagine the situation of a successful crypto investor with a property portfolio worth approximately $10 million—a luxurious home in Switzerland and a beachfront property in Miami. In the traditional financial world, they can contact their private banker and use these real estate holdings to obtain a flexible credit line that can assist with short-term spending needs. So what if most of their actual wealth is in Bitcoin, Ethereum, and other crypto assets? The situation becomes quite complicated.

“Some wealthy clients use collateralized loans, also known as Lombard loans or Lombard credit, to obtain cash against their assets without having to sell,” explains Jerome de Tychey, founder of Cometh. “But most traditional banks are not willing to accept digital assets as collateral.” That’s why Cometh, a new DeFi-focused company that recently became one of the few businesses in France licensed under the MiCA (Markets in Crypto Assets) regulation, is growing.

DeFi Lending vs. Traditional Lombard Loans: Speed vs. Volatility Risk

For a crypto-native investor, the process can be relatively straightforward. They can take their Ethereum tokens (ETH @2.45K current price), put them into a lending platform like Aave, and withdraw stablecoins such as USDC. But for those whose wealth has grown due to the crypto bull run and who are unfamiliar with the intricacies of DeFi protocols, this process can be confusing. This is where specialized services like those offered by Cometh come into play.

One of the main advantages of DeFi lending is speed. A Bitcoin-backed loan can be processed in just 30 seconds on some platforms, whereas a traditional Lombard loan from a private bank can take up to 7 days. Additionally, DeFi loans are permissionless—meaning no credit checks or tax returns are required—making them particularly attractive for those who want to keep their financial affairs private.

However, speed and privacy come with trade-offs. Crypto loans face an unparalleled challenge not as severe as traditional lending: the volatility of crypto asset prices. When Bitcoin or Ethereum suddenly drops in value, smart contracts can automatically liquidate collateral— a process that happens within seconds and leaves no room for manual intervention.

The Critical Risk of Price Volatility in Crypto Loans

The volatility of cryptocurrency prices is a double-edged sword for crypto-wealthy individuals. While large upward price movements can make them richer, sudden downturns can lead to financial catastrophe. For example, if an investor posts $100,000 worth of Bitcoin as collateral for a $50,000 loan, and the BTC price (currently $78.75K) suddenly drops by 60%, the smart contract may liquidate their collateral without warning. No negotiation, no extension—all automated.

This is the difference between DeFi lending and traditional Lombard loans. With a private bank, if you are given a loan against your stock portfolio and the stock price drops, your banker can reach out and work with you on a solution. In DeFi, the code is law—and law is enforceable within milliseconds.

“It’s still somewhat complex and sophisticated for ordinary people,” says de Tychey at the recent Crypto Finance Conference (CfC) in St. Moritz, where we discussed new solutions. “Most of what we do is the kind of service that helps family offices and ultra-high-net-worth individuals with large amounts of crypto to access credit lines without having to sell their assets.”

The Rise of Tokenization: DeFi Strategies Meets Traditional Finance

After obtaining its MiCA license, Cometh began exploring innovative ways to bring DeFi strategies into traditional securities. Using ISINs (International Securities Identification Numbers)—the unique identifiers used for stocks, bonds, and derivatives worldwide—DeFi protocols can be adapted to protect securities-based portfolios.

This means that if you have Tesla shares in your brokerage account, you can use them as collateral to obtain a DeFi-style credit line without transferring the shares into the crypto ecosystem. “We are looking at solutions similar to private lending products accessible to anyone with a brokerage account,” explains de Tychey. “This is a form of tokenization, but the reverse—it’s a true ‘tradification’ of DeFi. We handle the complexity, infrastructure, and compliance requirements—so that wealthy clients can leverage their assets with confidence.”

This innovative approach reflects a broader trend: the convergence of DeFi and traditional finance. For ultra-wealthy individuals, the future is likely to be hybrid—opportunities to leverage crypto, stocks, bonds, and real estate through a unified lending infrastructure that offers DeFi’s speed combined with the regulatory certainty of traditional finance.

Finally, those who became millionaires through Bitcoin and other digital assets are now enjoying the benefits of financial innovation specifically designed for them—solutions that help them raise cash for yacht upgrades, mountain resort getaways, and Cannes vacations without having to sell their precious crypto holdings.