Circle's PoloniEX acquisition and meaning going forward

in crypto •  8 months ago

Dear All,

I am sure you heard that Circle, a GS backed digital payments company is buying PoloniEX. @jrcornel did a nice post about it.

https://steemit.com/circle/@jrcornel/circle-buys-poloniex-for-roughly-usd400-million

Circle CEO is Jeremy Allaire. Used to allow people to buy and sell BTC, not anymore. Circle is best-known product is a mobile payments app called Circle Pay. Think about competition with Venmo/Square using crypto on the backend. They also do massive market making (e.g. Circle trade) in the crypto space. Next is Circle invest which will be an investment product.

With that said, I would like to emphasize the importance of this transaction by giving further context, on the financial and regulatory side.

Size- $400mm for a 3 year old company let's all agree it is a material amount.

"According to a source with knowledge of the deal, Circle paid roughly $400 million to buy out Poloniex, which launched in 2014.

https://www.coindesk.com/circle-acquires-poloniex/

Also I found this leaked document on twitter. Everyone should read it. It gives really good insights on the thinking behind the purchase and the overall regulatory position on the industry. Very positive for people willing to work collaboratively.

Image uploaded from iOS.jpg

Other note worthy comments:

Erik Voorhees, CEO of digital asset exchange ShapeShift, expects more cryptocurrency companies will consolidate in 2018, especially given the sharp increase in their capital holdings.

The entire cryptocurrency market capitalization has also grown from around $20 billion at the start of last year to around $500 billion in the last few weeks, according to CoinMarketCap.com.

"These markets are still in their infancy but they hold enormous promise," Circle co-founder and CEO Jeremy Allaire told CNBC in a phone interview Monday. "Maybe the first $1 trillion company in the world will be created in this space."

Please comment, follow me and upvote, I will do the same.

Lio

Sources: https://www.cnbc.com/2018/02/26/circle-acquisition-of-poloniex-is-just-the-beginning-of-likely-consolidation-in-crypto.html

Cool video:
https://finance.yahoo.com/news/circle-ceo-will-compete-venmo-coinbase-140012680.html

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
Sort Order:  

Circle has raised nearly $140 million in Poloniex funding from Goldman. We all know that Circle Internet Financial is a company backed by Goldman Sachs. It’s kind of funny and I laugh at these hypocrites while being backed by opposition of crypto and at the same time investing in company that has to do only with crypto. It seems to me they are completely confused abou blockchain technology especially cryptocurency. Anyway, This is big news for Circle since they used to be best way to buy Bitcoins from 2015 to 2016. They had a popular app on the app store similar to coinbase but they didn't charge any fees. Obviously they loose a lot of support while they stop selling BTC through their Circle Pay app. I hope they will help growing blockchain technology including crypto even with Goldman Suchs backing.

·

thanks for the additional clarification here.

Goldman Sachs backed... What's your take @liotap, will the corporate financial sector bet on destroying crypto or co-opting it?

·

Crypto is a fast moving train. There is an old saying in trading that Wall street traders live by which is "dont step in front of a moving train". I think they are jumping on the train as they see various opportunities to profit, "helping" write the necessary regulations. All good things for mass adoption in my view.
any industry/company that want to move towards collaborative environments cannot afford to miss the boat. there is too much at stake. let's realize it is a $400mm deal where Circle buys PoloniEX. Does not take a 51% stake, buys the while thing making it the largest crypto M&A to date. remember thinking "$1b for an app that lets you post pictures? man that's crazy" Well that was FB buying it cheap and creating synergies to solidify its competitive advantage for years... It is likely that we will look at this trade in the same way.

Great post @liotap and find re Circle's info memo. GS appears to have jumped in with both feet and obvious is that this acquisition further supports we have thought, that Wall Street has been playing both sides of the crypto "trade", just like the old days of OTC stocks or more akin to the Junk Bonds back in the 80's to mid-90's (I have noted this on other posts). They slam the asset class they want to become active, and buy on triggered corrections, dips forming their strategic positions. Then they formally support the asset class through M&A, cap markets, market making (legitimacy/liquidity), research/analysis (recommendations) and long term investors (individuals/ investor funds). With this purchase, GS is clearly supporting and indirectly involved. This is another step closer towards greater legitimacy and acceptability. Lets now see how the others will counter to GS.

One day before this announcement, on Jan 25th, Goldman's Senior Strategist for Global Investment Research released a video about the Bitcoin "bubble". Again showing how they play both sides of the trade.

https://www.facebook.com/goldmansachs/videos/10155852419177247/

I self upvoted to push up my comment higher for your thoughts.

·

Typical of GS and others, facilitating negative news on assets that they are investing in on the dips.

That’s a great news. I hope this means a change to NY residents as well since I live here, this exchange is not allowed to accept New York residents because it lacks a state license to operate a cryptocurrency exchange. However some New York residents did get around it and had claimed that they lived elsewhere, so they were able to trade on Poloniex. Clearly, people can get around things like IP restrictions, and other restrictions, and people do it all the time.

·

It is my understand that NY state is open to reconsidering the Bit license. the sooner the better surely for all of the residents there.

Thanks for the additional analysis and details Lio! Very helpful to put the big picture together!

A very good information @liotap, this is very useful for many people. Especially for myself, therefore I am very happy to follow your article. Because you always share a new information and knowledge about steemit for me. So, I can learn a lot about Steemit from you. I also often read posts from @jrcornel, because I also follow her post. Because he also always discusses information that is very useful for the crowd.

This post you explain "Circle's PoloniEX acquisition and meaning going forward". Actually I do not really understand with Circle, but I will keep reading and learning to be able to know about it. To be honest, I was still very stupid about Crypto and Bitcoin. But I will not give up and keep learning from the articles of those who discuss about it. I want to know about it all, let me be as successful as other people out there.

I will continue to read and understand gradually to be able to get knowledge of your post, and I will find again in Google about the explanation of your article. So I can understand about it all. Thank you and hopefully you will be more successful to work, for all the good you have shared for everyone.

wow Circle paid roughly $400 million to buy out Poloniex which is lounched in 2014 that make easy for people and and have mobile wallet now 2018 are the year of crypto!

Since I follow your posts, much knowledge as I get, you present content that is extremely valuable for beginners like me, according to me poloniex site includes very young trading based on whois.com data

Screenshot_2018-02-28-00-47-43.jpeg

but the site is very fast growing, perhaps because the fee imposed is very cheap and a thriving trading players.
before I had read about this site although it has never been tried, because I'm not yet adept at trading. so now can only learn for the next try.
thanks for content valuable @liotap

Your post is very valuable to me, because you always share content that is very useful for everyone. Especially for myself, who just joined in steemit and still very little knowledge about Steemit. With me often following and reading an article like this one, I can quickly have new knowledge about Steemit, Bitcoin, Crypto, Circle and about how to price treding in the market. I am very amazed at you, because you have a very genius mind, so you can master all about steemit. No wonder, if you are successful at Steemit. I will continue to follow your way to succeed. thank you @liotap.