Coinbase could buy Xapo

[kenzawak]

According to an article on TheBlock, Coinbase is leading the chase to buy Xapo, worth $50 millions.
Their main competition seems to come from Fidelity Digital Assets.

https://www.theblockcrypto.com/2019/05/16/coinbase-in-advanced-talks-to-acquire-xapo-sources/

"-Coinbase is in advanced talks to buy custody provider Xapo for ~$50 million plus an earn-out in order to boost its custody business, sources tell The Block
-Coinbase has been locked in a neck-and-neck race with Fidelity Digital Assets for the prized asset for the past few weeks
-Xapo is said to have nearly $5.5 billion in assets, or 700K bitcoin, under custody
-Xapo is led by CEO Wences Cesares, a serial entrepreneur from Argentina who has been a leading champion of bitcoin from its earliest days"

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[gentlemand]

Xapo is a blast from the past. I presume they've been busy hiding in their Swiss mountain vaults.

Don't really see why Coinbase would bother with this when they have their own custody thing going, but perhaps they want to scoop up those OG whales who bank with Xapo.

I'd be surprised if Fidelity let this go if they are serious about entering his area. They're not going to find an equivalent anywhere else. I wonder what Xapo's users make of all this.

[figmentofmyass]

Don't really see why Coinbase would bother with this when they have their own custody thing going, but perhaps they want to scoop up those OG whales who bank with Xapo.

market consolidation. xapo is one of their primary competitors, along with bitgo. consolidating market share has always been priority #1 for coinbase in all their endeavors.

I'd be surprised if Fidelity let this go if they are serious about entering his area. They're not going to find an equivalent anywhere else. I wonder what Xapo's users make of all this.

it's never a good feeling when the people you trust sell out. old school bitcoin whales getting in bed with fidelity? i imagine some of them will pull their coins out instead.

[buwaytress]

Could be a consolidation of sorts happening behind the scenes. Xapo supposedly has 700k BTC in custody (though how much of that really only lies in private keys in vaults still confuses me) and about 30% of that alone is for one client: Grayscale.

Coinbase opening up to many more countries, and then now about to be custodian for Grayscale (They were actually an early investor into Coinbase, so it's no surprise if they've still got ties and want to marry their families). Sounds like normal M&A work going on. Coinbase could probably afford to lose all the other clients too if they really felt so badly about being acquired (but they won't).

[Patatas]

So basically one shiity service is buying another to create the most fucked up crypto wallet of the future? Nice!

I don't know what retard does it take it create a wallet on Xapo in 2019. I don't even know how a wallet service earns so much money that get sold for millions. This is a different ballgame altogether.

[gentlemand]

So basically one shiity service is buying another to create the most fucked up crypto wallet of the future? Nice!

I don't know what retard does it take it create a wallet on Xapo in 2019. I don't even know how a wallet service earns so much money that get sold for millions. This is a different ballgame altogether.

The wallet for peons and their custody service will be very, very different beasts. You probably get to share a hot tub with Wences when you sign up for the blue riband service.

[magneto]

Interesting move. I've used both services and they pretty much offer the same thing. Both try to incentivise people to do off chain transactions with their respective platforms as to reduce fees, though Xapo's focus probably is more so on the microtransaction part of the equation.

Buwaytress raises an interesting point about the coins in custody at Xapo. It could be possible that Coinbase now wants to monopolise the custodial market and they feel like that this is a stepping stone.

But if anything, it's really getting rid of competition as opposed to integrating their services together, if this deal does somehow get finalised. It will also be interesting from a Xapo account holder's point of view if the transfer does occur, what the procedures will be and how much friction will be caused. But at the end of the day - they're in *advanced talks*, nothing is confirmed.

[The Sceptical Chymist]

Xapo is a blast from the past. I presume they've been busy hiding in their Swiss mountain vaults.

Seriously.  The last time I kept bitcoin in a Xapo wallet was two smartphones ago, before I knew any better.  There certainly isn't much discussion about them around here, and I hadn't even thought about Xapo in many months.

market consolidation. xapo is one of their primary competitors, along with bitgo. consolidating market share has always been priority #1 for coinbase in all their endeavors.

Makes me wonder how far Coinbase will take their consolidation/buyout efforts.  Right now I think there are too many crypto exchanges and too little regulation and/or accountability to customers. 

I'm thinking that in about 5-10 years there will only be a small handful of exchanges in operation, and they'll be tightly regulated--and we might not have to worry about shitty exit scams or disastrous mass hackings happening anymore, a la Mt. Gox & Cryptsy, or stuff like what's happening with Cryptopia right now.  Coinbase might be one of the survivors if they succeed with acquisitions like this.

old school bitcoin whales getting in bed with fidelity?

Yeah, this is the first time I'm hearing of Fidelity trying to get into the bitcoin market (I don't read crypto news other than what's on this site).  I'd have to think about it some more, but right now I have mixed feelings about it.  It might be good to have traditional, mainstream financial institutions getting involved with crypto, but on the other hand I don't want to see bitcoin get into their hands exclusively. 

I happen to like being able to trade crypto 24/7 on foreign exchanges without having to do KYC.  I can see all that coming to a screeching halt once banks and traditional brokerages take over.  Anyway, it'll be interesting to see what Xapo's final fate will be.

[BitHodler]

So basically one shiity service is buying another to create the most fucked up crypto wallet of the future? Nice!

I wouldn't call Coinbase a shitty service. It's the main exchange in the US and to some degree in Europe for money to enter this ecosystem. They have done wrong in the past, but more good in my opinion.

I know Bitcoiners don't like how they seem to have taken a massive dive in the shitcoin sea, but it's a business at the end of the day, and they haven't added the worst possible trash that doesn't stand a single chance to survive.

One way or another, you need to please dumb money with shitcoins to buy the more profitable big coins later on. Why would they choose Coinbase if they only had Bitcoin and Ethereum? They would go to Kraken or Bitfinex.

[1Referee]

Coinbase already holds over 1 million BTC in custody, so with the almost 800,000BTC that Xapo holds in custody it will be a fucking time bomb.

This once again shows that people have lost their mind. For once you are able to actually own the asset and people are still like passing it off to a bank like entity to take care of it. It's so silly that you have to ask them if it's possible to withdraw your funds. Wait for the moment they tell you that you can only withdraw like 1-5% of your stack a day, that's when you'll regret having used them.

From the banking system where your fiat is locked up, now to crypto exchanges where your crypto assets are locked up. Nice.

[gentlemand]

This once again shows that people have lost their mind. For once you are able to actually own the asset and people are still like passing it off to a bank like entity to take care of it. It's so silly that you have to ask them if it's possible to withdraw your funds. Wait for the moment they tell you that you can only withdraw like 1-5% of your stack a day, that's when you'll regret having used them.

There's the non entities who signed up for Xapo because they paid the fees once upon a time, and there are Wences's mates who parked their money in his magic laptop that lives in a Swiss mountain. That's who Fidelity and Coinbase are after.

If Coinbase buy them I guess the non entities will carry on as before and be absorbed. If Fidelity buy them I presume the nobodies will be told to withdraw and not come back.

[LTU_btc]

Interesting news. In past, maybe 3-4 years ago Xapo was very popular wallet and it was serious competitor for Coinbase. But in recent years it looks that they lost huge number of users. People left Xapo because they didn't provided good service - ridiculous fees, bad customer support, no working debit cards and etc. But still, I'm surprised that they hold such big number of Bitcoins - over 700k.
I'm not sure about price that Coinbase are going to pay to aquire Xapo. $50 millions - is it a big price for such service? I suppose that's not very big money for Coinbase.

[figmentofmyass]

old school bitcoin whales getting in bed with fidelity?

Yeah, this is the first time I'm hearing of Fidelity trying to get into the bitcoin market (I don't read crypto news other than what's on this site).  I'd have to think about it some more, but right now I have mixed feelings about it.  It might be good to have traditional, mainstream financial institutions getting involved with crypto, but on the other hand I don't want to see bitcoin get into their hands exclusively. 

sadly, i think that's the inevitable course we're on.

fidelity is the most likely legacy player to bring custody to market for derivatives (they've been doing r&d in this space since like 2014 or something) but others are working on it too. citibank's DAR plans are/were intent on custodying bitcoin for institutional trading.

in the end, they (and bakkt as well) are gonna give us paper bitcoins. it'll be interesting to see how much demand a fractional reserve institutionally traded bitcoin will soak up from the spot market and if it can help keep a lid on prices.

with so much volume traded on the comex and london gold market, it's no surprise why gold spot exchanges don't really drive the price. is that the future for bitcoin too?

I happen to like being able to trade crypto 24/7 on foreign exchanges without having to do KYC.

you're in the states, right? where are you trading these days? the options seem to be getting slimmer and slimmer. if we get the axe from binance, there won't be much left.