Most of the companies in the crypto world boost their services through collaboration or through acquiring other companies in order to gain more control, and this time, Coinbase is taking the bold step so to enhance its services through acquisition further. Yes, Coinbase the US-based cryptocurrency exchange is all set to acquire Xapo a wallet custody service provider. Coinbase is currently in high-level talks with Xapo and giving tough competition to Fidelity Digital Asset. Coinbase is making more news due to its acquisition.
One of the sources revealed the news of the next big move of Coinbase and said that the company might add one more company to its acquisition list, and Xapo is currently the one on its eye. Xapo might be acquired for a worth of $50 million in cash, and this will eventually help Coinbase to improve its own custody business services.
Xapo is a Hong Kong-based firm that stores its Bitcoin in a private warehouse. The warehouses are spread across five continents and believed to be the biggest Bitcoin custodian of the world. Xapo, the crypto service provider, offers services mainly BTC wallet, Bitcoin debit card, and cold storage vault. The company was launched in 2014 and supported by key investors like Greylock Partner and Index Ventures, Winklevoss Capital, and Blockchain Capital. The Xapo’s asset under custody is valued at $5.5 billion. The Xapo platform has managed to raise a fund of $40 million.
Sources say:
” Coinbase and Fidelity Digital Assets have been locked in a neck and neck race for the prized asset for the past few weeks, with Coinbase ultimately prevailing.”
Coinbase has succeeded in acquiring around 14 companies, along with Paradex a P2P trading platform and Earn a crypto-based micro-task platform and Neutrino among others. The goal of Coinbase is to build open worldwide financial system powered by blockchain technology and to boost its crypto offerings across the world.
Xapo CEO, Wences Cesares has been a Bitcoin supporter from the beginning. It’s not sure whether they have finalized the deal and urges sources to protect the anonymity.
CEO of Coinbase Brian Armstrong spoke at crypto and blockchain industry conference Consensus, held in New York that the objective of the firm is to change the financial service system completely and not just to upgrade.
“The most important thing to understand about the crypto-economy is that we’re not simply righting the wrongs of finance 1.0. We’re creating an entirely new way to access financial services.”
According to Xapo reports, the company maintains crypto assets of worth $10 billion and is through its customers of 1.5 million across the globe. Users can make use of the mobile app to access their Xapo Wallet, exchange funds from and to Xapo Vault. To store bitcoin, Xapo does not charge the users but rather makes revenue through OTC trading.
Brian Armstrong informed within a year after the launch of Coinbase Custody; the firm managed to receive a fund of $1 billion in assets under management. Nearly 70 organizations have requested to the service at that time, and the new custody service for the institutional investor was officially introduced in July 2018. The company stated that this service would allow clients to participate in the crypto ecosystem via proof-of-stake and distributed management.
Coinbase had earlier acquired Neutrino, and the company faced a lot of criticism due to the company’s leadership.