Circle Acquires Poloniex, on Crypto Assets and Bringing Fiat Pairs to Focus
Circle, payments and cryptocurrency company that raised over $100 million from leading venture capital firms and financial institutions such as Goldman Sachs, has acquired cryptocurrency market Poloniex to serve the sector.
Sean Neville and Jeremy Allaire, the co-founders of Circle, formally announced the purchase of Poloniex by Circle on February 26, welcoming the founding team of Poloniex along with the cryptocurrency exchange's existing user base.
The company noted that under the umbrella of Circle Trade, Poloniex will start to provide considerable liquidity and an efficient trading platform for investors in the global cryptocurrency market. With Circle's resources and capital, Allaire promised that Poloniex will have the ability to scale effectively, with risk, compliance, and technical operations handled by the Circle team.
«Circle Trade serves institutions and investors as one of the world's largest providers of crypto asset liquidity; and our forthcoming Circle Invest app enables individuals to tap into crypto asset investment through an easy, seamless mobile experience. Now Poloniex addresses another key element of Circle's product foundation: An open international token marketplace,» said Circle.
At one point, Poloniex was the most significant cryptocurrency exchange in the international market, before the entrance of major cryptocurrency trading platforms such as Bittrex and Binance. It was the first exchange to offer cryptocurrency-to-cryptocurrency trading in a large scale.
The Circle team further highlighted that it will allocate its assets in supporting tokens or crypto assets, and introducing fiat pairs with which traders can trade between cryptocurrencies and fiat currencies such as the US dollar and British pound. The Circle team stated:
«We also look forward to scaling Poloniex up and out through market growth and localization, raising token listings where appropriate and possible, and researching the fiat USD, EUR, and GBP connectivity which Circle already brings to its compliant Pay, Trade, and Invest products. More on these attempts to come.»
Within 6 months, Binance became the greatest cryptocurrency exchange in the world, adding more than a million users each month. On average, Binance records over $2 billion in daily trading volume, mostly coming from other cryptocurrencies and tokens.
Essentially, Poloniex is targeting the same market as Binance, and given the dominance of Binance and other cryptocurrency-to-cryptocurrency exchanges such as OKEx and Bittrex, it's not realistic for Poloniex to overtake these platforms in the short term.
But, with fiat pairings, Poloniex could appeal to a larger consumer base seeking to get a cryptocurrency exchange that supports both fiat monies and tokens that enable traders to hedge the value of cryptocurrencies to fiat currencies and purchase tokens with fiat money.
The Circle team also noted that with the acquisition of Poloniex, it will delve into the evolution of a decentralized marketplace for assets, physical products, and other commodities.
«We envision a strong multi-sided distributed marketplace that can host tokens which represent everything of significance: physical goods, fundraising and equity, property, creative productions such as works of art, literature and music, service rentals and time-based rentals, credit, futures, and more,» added Allaire.