Circle acquired one of the biggest crypto exchanges, Poloniex in a $400 million deal on Monday. This event provides a clue for a rising Goldman Sachs – bitcoin interest. This combination would bring the Circle into an open competition with the biggest US exchange Coinbase.
Acquisition of Poloniex cryptocurrency exchange by Circle
On Monday, the cryptocurrency startup and the mobile payments company, Circle took a major leap by acquiring one of the most active crypto exchanges in the world Poloniex. It has been reported that the deal is somewhere around $400 million.
According to the official blog of Circle:
“We’re proud to announce that Circle has extended its commitment to a new vision for global finance by acquiring Poloniex, a leading token exchange platform.”
Circle blockchain based liquidity provider providing over-the-counter bitcoin trading hasn’t disclosed the details of the deal. But the company has certainly big plans for the future as explained by the Circle in its blog:
“Firstly and immediately, you can expect Circle to address customer support and scale risk, compliance and technical operations to bolster the existing product and platform. Poloniex achieved momentum and success with rocket ship velocity — a magnificent accomplishment, but one that also comes with whiplash.”
Founded in 2014, Poloniex is among the largest 20 crypto exchanges by trading volume that is excited about getting acquired by Circle as evident in the post at its website:
“We are excited to announce that as of today, February 26, Poloniex will be joining the Circle team and building on our foundations to further scale our platform, grow our global reach, and accelerate the token ecosystem in the months and years ahead.”
A Financial Giant in the Making…
With its mainstream investors, ample funds and sophisticated technology, Circle aims to create a much progressive crypto world. This acquisition will allow the Circle to compete directly against the biggest cryptocurrency exchange in the US, Coinbase along with the other front-line competitors like Bittrex and Kraken.
The past three months revenue Circle has been over $250 million and by combining these with the revenues of Poloniex, the company would have an annual run rate of more than $1 billion. With bitcoin soaring about 11.5 percent today and currently riding at $10,694, this seems to be the right moment for a company like Circle to acquire the crypto giant Poloniex. The Crypto community is also excited about this deal and believes that it is a good thing for the crypto industry.
Goldman Sachs- bitcoin: story behind the scene
Circle also has Goldman Sachs and IDG Capital Partners, a China-focused investment firm as its investors that raised about $140 million and has a valuation of approximately $420 million. Earlier this month Goldman Sachs was reported citing crypto investment as potential business risks despite the fact that it is one among the investment firms that allow their customers access to bitcoin futures. So while on one hand, the firm is increasing its investments in the cryptocurrency market, on the other hand, it continuous to criticise cryptos. This dual nature of business raises doubts on investment banking giants status on bitcoin and other cryptocurrencies.
What are your views on this Circle Poloniex acquisition? How do you think it will affect the crypto market and the wall street as well? Let us know below!
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I am an associate content producer for the news section of Coingape. I have previously worked as a freelancer for numerous sites and have covered a dynamic range of topics from sports, finance to economics and politics.