Coinbase & Fidelity are “Neck-in-Neck” in Race to Acquire Xapo

US-based cryptocurrency exchange Coinbase is in advanced-stage talks to acquire crypto custody service Xapo, sources have told crypto news source The Block.

Coinbase is reportedly seeking to purchase the company for roughly $50 million in order to boost its custody business, although he same source said that nothing is for sure yet–the deal still hasn’t closed, and talks have remained “fluid” in nature so far.

Discover Barcelona Trading Conference – A Top Tier Crypto Trading Event

However, Coinbase isn’t the only firm with its eye on Xapo. Fidelity Digital Assets has also been hot on Xapo’s trail–but hasn’t been as successful as Coinbase in its pursuit. The “neck-in-neck” race between the two companies has gone on for “weeks”.

Fidelity’s pursuit of Xapo is the latest of the company’s moves further into the cryptosphere. The company launched Fidelity Digital Assets earlier this year, and will reportedly begin offering crypto trading within the next several weeks. Coinbase’ pursuit of the firm likely signals an effort to diversify sources of income so that the company is less dependent on cryptocurrency prices.

If Coinbase is successful, the acquisition will be the company’s fourteenth since its founding. Many of these acquisitions have been made over the course of the last year, including blockchain analysis startup Neutrino and educational reward platform Earn.com.

Suggested articles

How the FX Industry Can Benefit from Outsourced ITGo to article >>

Coinbase Could Seriously Benefit from Xapo’s Holdings

As one of the oldest crypto custody services on the market, Xapo is rumoured to care for over 700,000 BTC ($5.5 billion.) It is known for certain that Xapo holds at least 226,000 BTC that belong to the Grayscale Bitcoin Trust.

 

The addition of such a large amount of assets under custody (AUC) would be massively beneficial to Coinbase, which could also adopt Xapo’s business model as part of the acquisition–Xapo does not charge customers for storing their Bitcoins. Instead, the company generates revenue by using the assets in its custody for over-the-counter trading.

 

The company has caught quite a bit of positive attention, boasting an impressive list of Silicon Valley and crypto-industry VCs, incuding Winklevoss Capital, Blockchain Capital, Greylock Partners, and Index Ventures.

Technical Analysis, Stockmarkets Insights, Trading Tools: Biedex.com
Register New Account
Reset Password