Coinbase to ‘Store 5% of all the BTC in the World’ Following Xapo Deal
Major American cryptocurrency exchange and wallet Coinbase has bought the custody interests of Xapo, a company famous for stashing its rich clients’ crypto holdings in a secret Swiss former military bunker, located underneath a mountain.
Coinbase paid USD 55 million for the deal, and – per a company blog post – now has a whopping USD 7 billion worth of cryptocurrencies under its custodial management.
Per a report from Fortune, the move is part of “an aggressive push by Coinbase to expand its custody services,” and could result in Coinbase “storing over 5% of all Bitcoins in circulation.” The media outlet also says that Coinbase found itself dragged into a bidding war for the Xapo custodial interests, and was forced to outbid American investment services company Fidelity.
Coinbase said that it now stores cryptocurrency “on behalf of more than 120 clients in 14 different countries, making it the largest <...> institutional custodian in the world.”
Whether institutions were going to adopt crypto or not was an open question about 12 months ago. I think it's safe to say we now know the answer. We're seeing $200-400M a week in new crypto deposits come in from institutional customers.— Brian Armstrong (@brian_armstrong) August 16, 2019
Fortune reports that Xapo says it will continue running its own exchange business, and quotes its founder Wences Casares as stating he will remain the company’s CEO.
Casares said that Xapo had been looking to sell its custody interests for several months, and wanted to put its full efforts into its “core” exchange interests.
The CEO stated that its custodial services had only ever been intended as a “sideline” project, although much of the world has long been wowed by images and videos of the crypto vault, which would not look out of place in a James Bond film.