According to theblockcrypto, Coinbase is negotiating the acquisition of the cryptocurrency wallet and the bitcoin hosting business of the hosting provider Xapo. The US financial services giant Fidelity is one of the competitors. According to people familiar with the matter, Coinbase is in a leading position in the negotiations, and the acquisition is expected to reach 50 million US dollars.
Bitcoin held by Xapo or over 7%
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Xapo is a Swiss-based company that offers online Bitcoin wallet, offline cold storage and Bitcoin-based debit cards. In 2014, Xapo's total financing amounted to US$40 million. The investors include well-known investors such as Greylock Partners and Index Ventures, as well as well-known investors such as Yahoo founder Yang Zhiyuan. Consultants include former US Treasury Secretary Larry Summers, former Citigroup CEO John Reed and Visa co-founder DeeHock. Xapo also owns the precious Bitlicence of New York State.
Xapo CEO Wences Casares is also one of the early investors in the Bitcoin field. He is the key bitcoin "evangelist" in Silicon Valley. He has successfully changed Bill Gates' negative attitude towards Bitcoin and has persuaded PayPal President Riederhof Man invests in Bitcoin.
The advantage of Xapo lies in the offline bitcoin “treasury” across five continents. According to Bloomberg, Xapo has built a bitcoin storage facility in an abandoned military base in the Swiss mountains. The security measures are extremely complicated. “All customers’ DNA must be It is collected for security, and the fingerprint scanner in the vault is also equipped with a pulse reader to prevent someone from pressing the fingerprint with the cut finger." The report also shows that today's Xapo holds more than 7% of bitcoin, worth more than $10 billion. And Diar's research also confirms this point. Diar pointed out that Grayscale or the organization with the largest number of bitcoins in existence today holds more than 200,000 pieces, and Grayscale's bitcoin is hosted by Xapo, which is its major customer. One.
Fierce competition in the hosting market
Hosting can greatly simplify the operation and risk of holding Bitcoin and is considered to be one of the keys to institutional investors entering the encryption market, while Coinbase and Fidelity are the two major service providers.
At the Consensus Conference on May 15, Coinbase CEO Brian Armstrong announced that the exchange's hosted product, Coinbase Custody, had managed $1 billion in assets after only 12 months of launch. It is worth noting that 60% of Coinbase's trading volume comes from institutions. 70 institutions have signed up. Not only that, but the current amount of funds held each month is still increasing significantly, and the monthly growth has reached 150 million US dollars.
Recently, Fidelity has also begun to provide cryptocurrency hosting services for institutional investors, and will soon launch a cryptocurrency exchange. Fidelity Investment Group is one of the world's largest financial services providers, managing up to $2.4 trillion in capital, and its business is important for institutional investors.
As one of the first companies to research secure storage of cryptocurrencies, XAPO has a mature solution, and its huge user inventory far exceeds the number of existing Coinbase customers. If Coinbase or Fidelity can acquire its hosting business, it is undoubtedly for hosting. Market advantage is significant (Mars Finance)