Coinbase Will Control 5 Percent of Bitcoin’s Circulating Supply After Acquiring Xapo

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San Francisco-based cryptocurrency exchange Coinbase has asserted its dominance in the cryptocurrency custody niche by acquiring Xapo for $55 mln, Fortune reports. As a result of this deal, Coinbase will be responsible for storing a staggering 5 percent of Bitcoin’s circulating supply.

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Coinbase’s digital wealth

An anonymous source told Fortune that the Brian Armstrong-led exchange has managed to snatch the deal from mutual fund giant Fidelity Investments, which has been keen on crypto for a long time.

As reported by U.Today, Grayscale recently transferred $2.7 bln from Xapo, its long-time partner, to Coinbase Custody, which is considered to be one of the biggest cryptocurrency transactions ever.

Xapo will still control its ultra-secure vault in the Swiss Alps that has been grabbing headlines in the mainstream media for a long time. Wences Casares will also remain the firm’s CEO.

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Shifting focus to retail

From now on, Xapo will solely focus on operating its Bitcoin exchange after ceding ground to Coinbase in the crypto custody race.

It’s hard to do a consumer business well at the same time as an institutional business. Earlier this year, we looked for a home for it, said Casares.

Its retail business enjoys a growing popularity in Latin America, and Casares himself has a vested interest in that region given that he comes from inflation-stricken Argentina.

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