Crypto Exchange Poloniex Acquisition Rumored to Have Price Circle $400 Million
Fintech startup Circle reportedly paid $400 million to acquire cryptocurrency exchange Poloniex, positioning the institutionally-backed business as a direct rival to Coinbase from the US market.
Poloniex Acquisition Rumored to Have Cost Circle $400 Million
On Monday, CCN reported on Circle's acquisition of Poloniex, which is currently the world's 14th-largest market by 24-hour trading volume. The companies did not disclose the terms of the deal, but Fortune, citing an unnamed source familiar with the matter, has reported that Circle paid $400 million to acquire the US firm, which is based in Boston.
This acquisition, one of the largest in the industry's history, is notable for a variety of reasons, not the least of which is that Goldman Sachs, Baidu, and a variety of other notable firms have invested in Circle.
This, perhaps, could indicate that institutional companies are becoming more comfortable with being linked to firms planted firmly in the middle of the cryptocurrency supply chain — if only through indirect associations.
To some degree, this process has already begun in many major Asian markets. Upbit — now one of South Korea's largest exchanges — was established earlier this year with a subsidiary of online company Kakao. In a similar move, Japanese messaging platform giant Line recently filed an application with regulators to set up a cryptocurrency market, although this program is still under review.
Firms Line to Take Shot at Coinbase Dominance
As Fortune further noted in its lengthy bit on the purchase, the addition of Poloniex provides Circle — which also operates a profitable over-the-counter (OTC) trading desk — earnings figures like those of industry giant Coinbase, which is rumored to have made about $1 billion in revenue in 2017.
Circle also intends to roll out a new product this year — Circle Invest — which will offer a range of brokerage and custodial services like those presently available at Coinbase.
However, Circle is just one of several firms positioning themselves as direct competitors to the cryptocurrency industry giant, which has thus far dominated the cryptoasset brokerage market in the usa and a variety of other countries.
Last week, stock trading app Robinhood started accepting users from five states into the early access program for its new cryptocurrency trading platform, which allows retail investors to trade cryptocurrencies alongside stocks and exchange-traded funds (ETFs) in a single brokerage account.
Mobile payments firm Square recently rolled out Bitcoin trading in its popular Money App, and this feature is now available to most US customers.
Tokyo-based cryptocurrency exchange bitFlyer started a US branch last year, and it now claims to be the only cryptocurrency trading platform licensed on three different continents.
Finally, Canada-based cryptocurrency trading platform Coinsquare is preparing to raise $120 millionthrough an initial public offering (IPO) later this year, funds it has said it will make it a «powerful competitor to Coinbase..