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Bitcoin Startup Oversees $10 Billion On Behalf of Clients, More than 5,670 Banks in US

Xapo, one of the first bitcoin startups in the global market to store the most dominant cryptocurrency in the market in cold wallets on behalf of its clients, holds more than $10 billion worth of bitcoin for its investors.

Bitcoin as a Store of Value

According to the report of Tom Metcalf, two clients told Bloomberg in an interview that at least $10 billion are stored in the secure bunkers operated by Xapo in Switzerland, protected by Swiss guards and state-of-the-art security systems. $10 billion bitcoin based on the current price of bitcoin at around $9,300 could be worth $100 billion and $1 trillion in the future, given the unpredictable nature of bitcoin and the cryptocurrency market.

Already, at $10 billion, Xapo holds more deposits than 5,670 banks in the U.S, demonstrating that individual traders alongside retail and institutional investors have started to acknowledge and adopt bitcoin as a secure and robust store of value.

Reid Hoffman, the billionaire founder of LinkedIn and the founder of Greylock Partners, stated that Xapo has played a key role in convincing the global finance sector that bitcoin can be used to store value and large sums of money, especially for investors that have found difficulties in allocating funds into traditional assets like gold and silver.

“They’re the first folks who recognized custodial and security functions would be key. He made the pitch in the morning and in the afternoon I called him with an offer,” said Hoffman, who invested more than $20 million in Xapo more than three years ago, through his venture capital firm Greylock Partners.

Other investors and clients of Xapo including Ryan Radloff, the founder of CoinShares, stated the vast majority of investors that do not store their private keys by themselves or do not have the technical knowledge to keep bitcoin safely currently have funds stored in Xapo’s underground bunkers.

“Everyone who isn’t keeping keys themselves is keeping them with Xapo. You couldn’t pay me to keep it with a bank,” Radloff stated, who also revealed that he has more than $500 million stored with Xapo.

$30 Trillion Industry

The offshore banking industry is said to be a $30 trillion market, mostly dominated by banks, financial institutions, traditional assets like gold, and collectibles such as artworks and jewelries. High net-worth individuals store massive sums of money, assets, and commodities in the offshore banking industry with reputable financial institutions to ensure their funds remain safe.

However, investors are required to trust the third party service provider or intermediary to secure their assets securely, and do not have control over their assets. With bitcoin, investors have full control over their private keys, even when stored with custodians like Xapo, given that the services provided by custodians are fully audited.

The majority of long-term investors in bitcoin are anticipating the dominant cryptocurrency to ultimately challenge the $30 trillion offshore banking industry. Merely 10 percent of the $30 trillion offshore banking industry would be equivalent to $3 trillion, more than six times larger than the current valuation of the cryptocurrency market.

Joseph Young

Joseph is an experienced finance and cryptocurrency analyst / writer who offers unique insights to various aspects of this new digital world. As a well-known member within the blockchain community, he writes for numerous high profile news outlets such as Cointelegraph, BinaryDistrict, LiveCoinWatch and our very own Cryptocurrency365 to provide the latest articles.

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