AH, let the consolidation begin. Circle, a Goldman Sachs backed cryptocurrency “startup,” just bought digital token exchange Poloniex. Without financial details (GS loves secrets) it is estimated that it was around $400M and most likely in Poloniex getting shares. Great fit? YES! Circle is basically an execution firm making markets in about 70 different digital currencies/tokens with volume of around $2 billion daily. Combining that market making expertise with becoming an exchange is really smart. Will Goldman route order flow from their new crypto trading desk through them? Duh. Congrats and a great fit. Look for more combinations in the crypto exchange sector as market share will become paramount.
(Bill Taylor/ Managing Editor)
LONDON/NEW YORK (Reuters) – Goldman Sachs-backed cryptocurrency startup Circle has acquired digital token exchange Poloniex, Circle said on Monday, as it aims to cement its position as one of the leading players in the booming market.
Neither of the Boston-based companies disclosed the value of the deal that gives Circle control of a marketplace it said sometimes has daily volumes of more than $2 billion, with around 70 different digital currencies and tokens traded.
Fortune magazine said the deal was worth $400 million, citing a person familiar with the matter.
“We’ve been really impressed with what they have been able to pull off,” Circle co-founder and CEO Jeremy Allaire said.
“They defined what originally people thought of as ‘altcoin’ exchanges,” he told Reuters. The term altcoin describes newer cryptocurrencies than the more established bitcoin and ether.
Circle operates an app-based peer-to-peer payment network using blockchain, the technology which first emerged as the system underpinning cryptocurrency bitcoin. It is also one of the leading players in the over-the-counter market for bitcoin trading, and is soon launching a retail-focused app for buying cryptocurrencies, Circle Invest.
One of the best-funded blockchain startups, its investors include Goldman Sachs Group Inc and Baidu Inc.
Circle’s founders said they had discussed the acquisition with all of their investors, as well as with regulators, and that the deal was closed on Friday…”