Category Archives: crypto custodial

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Coinbase, Fidelity in 2-Horse Race to Acquire Xapo

Coinbase, Fidelity in 2-Horse Race to Acquire Xapo

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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Financial Giants Race to Launch Bitcoin Trading, Eyeing Institutional Money

Fidelity Weeks from Launching Bitcoin Trading Desk

Bloomberg has revealed that US financial services giant Fidelity Investments may only be weeks away from offering Bitcoin trading options for institutional clients. It will also launch a crypto custodial service.

Meanwhile, other reports have also surfaced of other financial firms such as Ameritrade and E-Trade, who are quietly testing Bitcoin trading on their respective platforms. Among all three companies, there are now about USD 4 trillion in asset under management. All of them have expressed interest in going into the Bitcoin trading business, although Fidelity will only focus on institutional clients, while E-Trade will also open doors to retail clients.

The race to open Bitcoin and other crypto trading to institutional investments is well and truly on, and many analysts believe that this will be the catalyst for a lasting momentum and rally to awaken Bitcoin from its current slumber, pushing it on its way to new heights.

Fidelity currently boasts an assets under management above USD 2.4 trillion so this news could signal the start of a huge rally for Bitcoin, particularly as the firm also has more than 27 million customers. Early this year, it said that its Fidelity Digital Assets crypto custodial platform would be available in March, although it seems the postponement has been because of the Bitcoin trading desk.

All this new developments have come on the back of consecutive weeks of growth enjoyed by Bitcoin, which is right now pushing at its resistance level of USD 6,000, while the rest of the crypto market is witnessing strong gains.

 

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BitGo Offers New Crypto Custodial Products for Financial Firms

BitGo has released a new suite of cryptocurrency custodial products aimed at Wall Street financial firms. It is claimed that 15% of Bitcoin transactions occur through BitGo’s wallet services, with BitGo software processing over USD 10 billion of cryptocurrency transactions per month. BitGo is seeking to attract USD 20 billion that it expects institutional investors to commit to cryptocurrency.

Institutional clients like hedge funds and stock brokerage firms require a custodian service that follows all of the laws and is properly regulated before they are willing to invest money. This is why BitGo acquired the Kingdom Trust Company as well as Kingdom Services earlier this year.

Kingdom Trust is a licensed qualified custodian regulated by the South Dakota Division of Banking which has over 100,000 clients with over USD 12 billion of assets. Using Kingdom Trust’s infrastructure, BitGo will offer legal and trustworthy custodianship of cryptocurrency assets, giving big investors and firms peace of mind when deciding to add cryptocurrency to their portfolio. The acquisition of Kingdom Trust still has to be approved by government regulators, but that hasn’t stopped BitGo from launching services managed by Kingdom Trust.

Having a trustworthy custodian makes cryptocurrency investment easier for investors, since they don’t have to deal with any of the technical details. They simply send their money to BitGo with an order for which cryptocurrencies they want, and BitGo takes care of buying the cryptocurrency on an exchange and securely storing it in a wallet.

Currently, BitGo supports 20 different cryptocurrencies and is looking to add even more so that it eventually provides custodial services for every cryptocurrency it deems worth investing in. BitGo offers three tiers of service: qualified custody where cryptocurrency is stored and secured with Kingdom Trust, institutional custody where clients manage BitGo wallets, and completely self-managed custody. This range of services provides solutions from consumer to institutional needs.

The value of all cryptocurrencies combined is worth just over USD 400 billion as of this writing, and has been growing by orders of magnitudes the past several years. BitGo’s custodial services open up cryptocurrency to big investors like never before and will provide a conduit for money to pour into the cryptocurrency market from Wall Street. Trillions of dollars are invested in the stock market, and BitGo’s services will facilitate some of that money to be diverted into cryptocurrency.

 

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