Cryptocurrency corporate giants Coinbase and Fidelity are reportedly neck to neck in a bid to buy out crypto wallet provider Xapo, according to blockchain media outlet The Block.
Coinbase, a major crypto exchange based in the USA and recently expanded to the UK, is said to be in the lead after two weeks of intense negotiations, but digital assets fund manager Fidelity is not backing out at this stage.
Sources have told The Block that the Coinbase offer on the table now is for a USD 50 million buyout plus an earn-out to enhance its custody business, one of the services thought to appear attractive to retail and institutional digital asset owners.
Xapo’s CEO Wences Cesares was an early Bitcoin adopter and has built the company on custodial services, claiming almost 700,000 Bitcoin under custody, worth today over USD 5 billion, including some 226,000 Bitcoin belonging to Grayscale Investment. Xapo’s core product is cold storage vault custody of Bitcoin. Since launching in 2012, Xapo has managed to raise some USD 40 million in funding.
The aggressive move from Coinbase to edge out Fidelity will mean little to the average crypto investor, but in terms of industry proponents, this attempt at diversification of revenue and acquisition of another old hand in the nascent industry speaks volumes about the outlook for the blockchain and crypto sector in 2019 and beyond.
Crypto custodial services have been of increasing interest to corporate business, with even Goldman Sachs rumored to be considering inroads into the sector.
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