Coinbase just announced that they have acquired Xapo‘s Institutional Business for $55 million. This means that all the customers of Xapo now have to decide whether they want to continue storing their assets with Coinbase.
According to the information revealed, the majority of Xapo’s clients have already agreed on transferring their funds to Coinbase. However, if Coinbase succeeds to convince the rest of Xapo’s clients, then the Coinbase Custody will have around 860,000 BTC under their control. That accounts for roughly 4% of the total Bitcoin supply.
“This acquisition caps off a tremendous period of growth and innovation for Coinbase Custody. In just over one year since launch, Coinbase Custody has grown to over $7 billion in Assets Under Custody (AUC) stored on behalf of more than 120 clients in 14 different countries, making it the largest, most globally recognized and most trusted institutional custodian in the world,” Coinbase team wrote in their blog.
Many experts point out the tremendous growth of Coinbase Custody, which is only a year old, and only two months ago they reported their AUC valued at $1.3 billion. Now, as mentioned above, thanks to this deal, they now control $7 billion in digital assets. However, would this all be possible without the help of Coinbase and its history? If there were not such strong support from Coinbase, it wouldn’t have been possible. This is normal for a company of that scale to expand in such fast moves.
Coinbase now claims that they will have more than 120 clients from more than 14 different countries.
Additionally, CoinSpeaker has already reported all the details about this deal. It was in May and it was already known that Coinbase would most likely acquire Xapo for around $50 million (it turned out to be $55 million). However, the most interesting thing about this deal is that, now Coinbase has finally strengthened their positions in the market.
Previously we have reported that back then Coinbase was really concerned about Fidelity Digital Assets, a firm which recently entered the industry and considered it as the main competitor. Now, after acquiring Xapo, it’s safe to say that Coinbase Custody is the leading crypto custodian.
Xapo was founded in 2014. It provided BTC wallet and cold storage vault services. The company declared that it holds $10 billion in crypto assets for its more than 1.5 million customers around the world. Xapo had obtained $5.5 billion of assets under custody that reflects to around 700,000 Bitcoin which now got acquired by Coinbase. When looking at these numbers, it would more make sense if Xapo acquired Coinbase Custody, not the other way around.