Goldman Sachs-Backed Payment Company Circle Buys Cryptocurrency Exchange Poloniex

Goldman Sachs's chief executive Lloyd Blankfein told employees of his concerns with Donald Trump's immigration ban
AFP

Goldman Sachs-backed payments company Circle purchased cryptocurrency exchange Poloniex on Monday.

Circle Internet Financial Ltd. announced on Monday that they had acquired cryptocurrency exchange Poloniex. The announcement has inspired positive sentiments about the industry amongst cryptocurrency insiders.

Erik Voorhees, a player from Bitcoin’s early days, explained that 2018 might bring a lot of consolidation for the industry. “I think this is a really good sign for the industry. It shows that a lot of companies are going to start consolidating and that will bring [out] the best talent,” Voorhees said. “I think you’re going to see a lot of that in 2018. These companies have so much capital at this point.”

“Personally I’m excited to see the first bitcoin company IPO. I think it should be Coinbase,” Voorhees said. “It will be a huge milestone for an industry that no one took seriously five years ago.”

Circle CEO Jeremy Allaire argued that the purchase signals the cryptocurrency industry still has significant room for growth. “These markets are still in their infancy but they hold enormous promise,” Allaire said. “There’s going to be a huge amount of value creation.”

Allaire took a shot at JPMorgan Chase CEO Jamie Dimon, who is perhaps Bitcoin’s loudest critic. “I don’t know who the CEO of Sears was back in the mid-’90s, but I bet that CEO was making remarks about Internet shopping that were pretty dismissive,” Allaire said. “Maybe in 20 years no one will know who Jamie Dimon is.”

Michael Graham, a stock analyst, told CNBC that cryptocurrency exchanges are likely to consolidate over the next few years. “I do think the exchanges over time will need to consolidate,” Graham said. “If a company is going to be like a gorilla in the cryptosphere they’re going to need to make large, aggressive bets now.”

Ryan Selkis, the founder of an open-source cryptoassets datebase, suggested that the Poloniex acquisition is the best news of 2018 for the cryptocurrency space.

“This is tremendous for the broader industry’s health. Circle is a terrific company that sets high standards around consumer protection and self-regulation, and the Poloniex acquisition will make a wide range of digital assets more safely accessible to the broader public,” Selkis said.

The value of the deal has yet to be confirmed. Fortune Magazine floated a rumor that the purchase would cost Circle approximately $400 million.

 

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