Circle Buys Poloniex in Nine-Figure Deal
In a move that could spell some real progress in mainstreaming cryptocurrency, the mobile payments app Circle recently announced that it was buying the Poloniex cryptocurrency exchange for $400 million. There were unconfirmed rumors swirling around this development previously, but now, the rumors have been confirmed, and reflect reality.
Circle, which enjoys funding from Goldman Sachs, has three components to it as is: Circle Pay, which handles normal fiat currency transfer; Circle Trade, which helps provide liquidity to cryptocurrencies, and Circle Invest, which is coming soon and will help give regular folks a new opportunity to invest in cryptocurrencies. The purchase of Poloniex is likely to help make Circle Trade an even greater reality.
Poloniex itself offers 68 different coins, and represents the 14th largest cryptocurrency exchange around based on 24-hour volume stats. That’s not where it’s going to stop, though, based on word from Circle’s co-founders Jeremy Allaire and Sean Neville, who noted plans to turn Poloniex into a “Robust multi-sided distributed marketplace that can host tokens which represent everything of value: physical goods, fundraising and equity, real estate, creative productions such as works of art, music and literature, service leases and time-based rentals, credit, futures, and more.”
That would cover just about everything, all right, though why we’d need so many different breeds of token is unclear. Surely we could buy shares of real estate or works of art or commodity futures with bitcoin just as easily as hypothetical Landcoin, Drawcoin, and Porkbellycoin. We already have over 1,300 different cryptocurrencies on hand at last report; do we need more? Is there an added utility in some coins having value better suited to “time-based rentals” than to “works of art”?
Regardless, in the end, this move helps provide the necessary infrastructure that we so clearly need to help mainstream cryptocurrency. If Circle starts tapping cryptocurrency as a way to pay for normal purchases—even in the end-run fashion of cashing cryptocurrencies in users’ accounts and using the proceeds to pay for purchases—then we may well see a lot more users engaging in cryptocurrency buying and selling, giving us a much clearer path to the mainstream.