Crypto-custody service provider Xapo has become a hot cake in the market as both Coinbase and Fidelity are fighting neck-to-neck to acquire the crypto-custody service provider. If reports are to be believed, Coinbase currently holds an upper hand with an offering of $50 million to boost the services of the firm. However, the deal is not yet finalized and the talks are still open from the Xapo.
Apart from Coinbase, even Fidelity Digital Assets has also been eyeing for the crypto-custody firm Xapo, however, it is rumored that Fidelity push for acquiring Xapo is not as aggressive as Coinbase, but both of them have been fighting to get their hold on Xapo for weeks now.
While Fidelity’s efforts to acquire Xapo is seen as an expansion move, where the firm wants to have a stronghold in the crypto space. The firm has launched the Fidelity Digital Assets only last year, and the trading services on its platform is scheduled to get started within the next few weeks. On the other hand, Coinbase’s interest in Xapo services is being seen as a move to diversify the services that the exchange currently offers and also look for alternative income sources.
If Coinbase is able to acquire Xapo, it would be their 14th acquisition since its inception, most of which came last year which includes the likes of Neutrino and Earn.com
What Xapo Brings To The Table
Xapo is one of the oldest crypto custody service providers and rumored to hold 700,000 BTC worth $5.5 billion. Among the 70,000 BTC under its custody, 226,000 BTC belongs to Grayscale Bitcoin Trust. The acquisition of Xapo would help Coinbase due to the addition of a large scale of Bitcoin under its belt.
Coinbase can also adopt the working model of Xapo where the custody service provider does not charge any fee from the customers for moving their Bitcoin. Instead, Xapo generates most of its revenue by using the Bitcoin under its custody for over the counter trading.