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Coinbase Custody Acquires Xapo, Sees $7 Billion Growth

Today, Coinbase Custody has announced that it has completed the acquisition of Xapo’s institutional businesses. Coinbase Custody has acquired 55 Million U.S. Dollars, Xapo’s institutional business. The platform was in stiff competition with major investment company- Fidelity, who was also contending to acquire Xapo.

Xapo made its name in the field of wallet services, which was launched 6 years ago in 2013. The platform offers physical vaults wallet services, which are used to store the crypto funds of the user in an offline way. The offline aspect naturally offers great stability and safety. The physical vaults are based in Switzerland.

Coinbase Custody has seen immense growth since the past one year after the launch. It now boasts a 7 billion U.S. Dollars growth in AUC (i.e., Assets Under Custody.) The platform has a strong client base of one hundred and twenty clients who are from fourteen different countries of the world. No wonder, it is now the biggest, most internationally popular, and of course the most trusted platform on an international level.

Yesterday, Coinbase said that this deal with Xapo will help them grow further both in custody business as well as the assets under custody domain. They hope to cross the 7 Billion U.S. Dollars mark soon. On the other hand, the CEO of Coinbase Custody- Sam McIngvale said that the platform was not thinking to too much churn the crypto lending business in the coming times. He said-

Fundamentally, we have to help our investors earn a return on their assets. You can imagine lending out Bitcoin and earning interest on that.

The deal has made any of the major clients of Xapo to embrace Coinbase Custody. They have moved their crypto assets to the newly acquired home- Coinbase. For instance, earlier this month, Grayscale Investments moved its crypto funds which were worth of 2.7 billion U.S. Dollars from Xapo Crypto Wallet to Coinbase Custody. Many say that this step was taken under the influence of the acquisition. As a result, the Coinbase platform will store over 514,000 Bitcoin for the clients from Xapo. These cryptos are worth 5.3 Billion U.S. Dollars.

The Founder and the CEO of Xapo- Wences Casares is very pleased and confident about the deal between the company and Coinbase. On this matter he said-

In choosing Coinbase, we are confident that the Institutional Custody Business is going to a company that can provide great insurance, borrowing, and investment alternatives. […] We believe that Coinbase will take this opportunity to prove to our customers that they deserve their business.

There have been reports that if Coinbase will be able to attract the remaining clients of Xapo, then it would mean that Coinbase will have over 860,000 Bitcoin in its custody which would mean around 8 Billion U.S. Dollars.

On the other hand, the strong competitor of Coinbase- BitGo has constantly been gauging the deal very closely. On Wednesday, the company said that the current clients of Xapo are ‘extremely concerned,’ and as per the reports, they do not view Coinbase custody as a ‘comparable service.’ Additionally, the platform revealed that it will offer ‘qualified’ clients a yearly custody service, which will not cost them any fee. This offer is valid only till 30th September.

Overall, both Xapo and Coinbase Custody are happy and confident about the deal. They see the great potential and bright future, and better ways to serve the client base. In the official announcement, Coinbase Custody said-

It is with huge pride that we welcome Xapo’s Institutional customers to Coinbase. Their legacy, knowledge and experience will help to make our mission of creating an open financial system for the world a reality.

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Roxanne Williams

Roxanne Williams has recently joined as a market reporter for CryptoNewsZ - the 24/7 crypto news site, where she produces recent stories, technical analysis and price updates on world's leading cryptocurrencies.

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