The cryptocurrency market continue remains markedly volatile. However, the promises of emerging technology are beginning to pay off – and larger enterprises are taking notice. Investment firms and hedge funds are still exploring their options, but industry giant Goldman Sachs Group, Inc. (NYSE: GS) is leading the charge. They’ve recently started building a cryptocurrency trade desk, while also funding several blockchain based start-ups. These actions are promising for the entire cryptocurrency industry, with institutional money being the next step towards greater adoption.
The last quarter of 2017 showed the effects that consumer money on the market can have. The high price of Bitcoin (BTC) attracted an entire new class of investor, pushing the market to all time highs. The next bull run will almost certainly follow the full entry of traditional institutions into the market. While this may chafe the idealistic older generation of cryptocurrency investors, it is also one of the few ways to continue the exponential market increases we have seen in the past.
Circle Internet Financial, Ltd
One of Goldman Sachs main investment arms in the cryptocurrency world is through the Circle Financial platform. Circle performs many actions that are mirrored across blockchain payment systems. However, their Goldman Sachs pedigree inspires a far greater level of confidence. Outside of RippleNet’s blockchain juggernaut, Circle is one of few businesses that can compete with traditional banking.
Towards this end, they’ve released several products that allow average investors to get involved with cryptocurrency. The market is notoriously difficult to enter, from a technical standpoint, and these types of app will be critical moving into the future. Further, their Ethereum (ETH) blockchain based transactions service allows for rapid, friction-less international money transfers. They’ve also announced their intention to compete with the USD-pegged cryptocurrency Tether (USDT) through their own dollar-based coin. Considering the complaints about Tether’s lack of transparency, a Goldman Sachs backed stable coin could be beneficial for the market.
Acquiring the Poloniex Exchange
Perhaps the biggest news to come out of Circle is the recent acquisition of cryptocurrency exchange Poloniex. Although Circle previously allowed direct Bitcoin trading on their own platform, this was discontinued two years ago. Instead of trying to build their own exchange from the ground up, they seem to be focusing on adapting the Poloniex platform towards their goals. This includes adapting the existing exchange infrastructure towards increased compliance with anticipated regulations.
In addition, they’ve expressed a desire to tokenize many real-world assets and allow for their trade through the exchange. While Poloniex is not competing for the top exchange slot by volume, they did come in at a respectable 14th place overall. For Circle and their investors, this is a sweet-spot where they have the volume necessary to expand, without the baggage that would come with acquiring a top exchange. A traditional institution expanding into running an exchange could help bring some of the quality of life improvements necessary to expand cryptocurrency beyond its status as a relatively niche technological market.
Article By: Adam Stone