Using Crypto Assets as Collateral Instead of Selling
Jake Claver, who runs Digital Ascension Group, has been talking about how people with significant wealth approach their crypto holdings differently. They don’t usually sell assets like XRP when they need cash. Instead, they borrow against them.
I think this makes sense when you consider the tax implications. Selling crypto often means facing capital gains taxes, and then you’re out of the market. You miss any future price increases. But if you use your XRP as collateral for a loan, you get the cash you need while keeping your position.
Claver’s firm has actually set up partnerships with lenders who offer these XRP-backed loans. It’s not just theoretical. People are doing this right now.
The Problem with Emotional Selling
Claver points out something that many of us have probably experienced. A lot of crypto investors don’t have a clear plan for when to exit or how to manage their wealth. They might panic sell during market dips, or get greedy during rallies.
“XRP price action won’t change your life if you sell in a panic,” he said. That’s probably true for most assets, really. The price going up doesn’t mean much if you sell at the wrong time.
He suggests defining your limits and strategies before market volatility hits. When prices are swinging wildly, it’s hard to think clearly. Having a plan in place helps you stick to your strategy.
Business Structures Matter for Crypto Wealth
This is where things get more technical, but perhaps more important for long-term planning. Claver talks about using Wyoming LLCs for holding crypto assets. They offer some advantages over traditional corporate structures.
Pass-through taxation is one benefit. There’s also the option to elect S-Corp status, and potentially reduced payroll tax exposure if everything is structured correctly. These details matter when you’re trying to preserve wealth.
Thinking Beyond One Generation
In a recent YouTube video, Claver expanded on these ideas to include estate planning. Without proper structures, crypto wealth can get hit hard by estate taxes and generation-skipping taxes over time.
He mentioned dynasty trusts and generation-skipping trusts as possible solutions. These can allow assets like XRP to keep growing across generations while minimizing tax exposure.
But timing matters here too. With high-growth assets, you need to allocate exemptions before laws potentially change. It’s not something to put off indefinitely.
What’s interesting about all this is how the conversation around XRP is shifting. It’s not just about speculation anymore. People are starting to see it as a financial tool for liquidity, income planning, and long-term wealth preservation.
Making money with crypto might be the first step, but how you structure, protect, and plan around those assets determines whether the wealth actually lasts. Claver’s perspective suggests that the wealthy approach this differently from the average investor. They’re thinking about tax efficiency, business structures, and multi-generational planning from the start.
Perhaps that’s the real difference between temporary gains and lasting financial freedom. It’s not just about picking the right assets, but about managing them wisely over the long term.
