Coinbase ramps up acquisition spree

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The news: The Nasdaq-listed crypto exchange bought account aggregation startup Zabo so users can view their third-party crypto accounts within the Coinbase app, per Finextra.

Why this could succeed: Coinbase is helping users better manage their crypto holdings to stand out from other crypto exchanges.

Zabo’s API connects to any crypto exchange, wallet, or protocol, giving Coinbase users the added convenience of seeing their full balances and transaction histories across the different platforms they use. Standardizing and formatting data from the different accounts provides a more holistic picture of their crypto investments to help inform trading decisions and even do tax calculations. By contrast, most other exchanges, like Robinhood and eToro, only offer insights into accounts held with their respective platforms.

Looking ahead: Such acquisitions let Coinbase launch more value-added products to stay ahead of competitors, and crypto-focused funds are next.

In the past year alone, the exchange acquired crypto prime broker Tagomi, trade execution startup Routefire, and data analytics firm Skew. And Coinbase is now using its multibillion-dollar direct listing proceeds from April to double down on its acquisition spree and keep up with well-funded peers trying to challenge its pole position in the market: Crypto firms have already raised $7.27 billion in 2021, up from $2.8 billion in 2020, per CB Insights.

Next on its acquisition list is digital asset management firm Osprey Funds, which will expand its services beyond direct crypto trading. Osprey offers crypto-focused funds that give customers exposure to the asset class without having to purchase any cryptos. This is the latest hot investment vehicle in the sector: Last week, Wealthfront added two crypto funds, and Betterment is mulling a similar crypto offering. Goldman, meanwhile, is among more than a dozen firms awaiting regulatory approval for an ETF focused on crypto-related companies.

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