Circle shelled out $400 million to acquire crypto exchange Poloniex

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Reports have emerged that Circle shelled out a whopping $400 million to acquire cryptocurrency exchange Poloniex.

Circle acquired Poloniex, which is the 14th largest crypto exchange by trading volume, and this will place the company directly in competition with Coinbase in the US market. While the acquisition has been confirmed, there is no confirmation on the amount of money involve; however, a report by Fortune claims that Circle paid $400 million for the acquisition.

The acquisition is important considering that the crypto space has been seeing institutional interest over the last few months – specifically after Bitcoin futures started trading in the US. Some of the largest investment banks in the world have been sending out mixed signals towards their view of cryptocurrencies. Goldman Sachs is one of them and despite the CEO of the company being critical about bitcoin and cryptocurrencies, Goldman Sachs’ investment in Circle make them an indirect owner of Poloniex through investment.

While there is not indication that the stand could be seen as a u-turn from previous stand, it does indicate that there is a certain level of comfort when it comes to being linked to companies planted firmly in the center of the cryptocurrency supply chain – even if it’s indirect.

According to the report in Fortune, Circle plans to roll out a new product this year — Circle Invest — that will offer a range of brokerage and custodial services similar to those currently available at Coinbase.

The competition in the crypto space in the U.S. has been increasing lately. Just 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 has also rolled out Bitcoin trading in its popular Cash App, and this feature is now available to most US customers.

Tokyo-based cryptocurrency exchange bitFlyer opened 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 million through an initial public offering (IPO) later this year, funds it has said it will help it become a “strong competitor to Coinbase…by the end of the year.”

About the author

Belinda Carey

Belinda Carey

A finance girl by education, Belinda has been drawn to cryptocurrencies ever since Bitcoin first emerged in the 2009. Nearly a decade later, Belinda is actively working to spread awareness about cryptocurrencies as well as their impact on the traditional currencies.

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