Ethereum (ETH) To Thrive With Poloniex Acquisition
In an unprecedented move, the famous cryptocurrency exchange, Poloniex, was acquired by a Boston based company called Circle at around the 25th of this month.
Circle bought Poloniex for around $400 million. This is a large amount in that not even any active ICO has accomplished this figure. The only notable one is the Telegram ICO that raised a whopping $850 million in the presale.
But I am digressing. The Poloniex acquisition only means one thing: that Wallstreet wants in. And with the entry of financial heavyweights comes the need for a stable coin such as Ethereum (ETH) to facilitate trading in a new and improved platform that will see record-breaking trade volumes.
So how will Ethereum thrive if Poloniex has been acquired and under new management?
Firstly, and as I stated, is the official entry of the big fish from Wallstreet into the crypto-space. They are aching for the action and want an avenue of control in it. What better way than to acquire an existing platform which has built a reputation for itself. This saves Circle the time of building their platform from the ground up and convincing people to sign up.
Poloniex does a good $161 Million in daily trade volume at the moment of writing this. It is ranked 14 on coinmarketcap.com in terms of the same daily trade volume. With the Circle acquisition, we are sure to get a good $1 Billion daily trade volume that will propel Poloniex to position 4, and ahead of Bitfinex, on coinmarketcap.com.
Of the current daily trade volume of Poloniex, 12.33% in trade is from Ethereum (ETH). The value in USD comes to around $19.9 Million. Now, imagine the same 12.33% but for a daily trade volume of $1 Billion. That will bring the amount of Ethereum (ETH) traded to $123.3 Million and hence increasing demand of ETH and possibly pumping it a few hundred dollars in the upward direction.
The second reason why Ethereum will thrive with the news of a Poloniex acquisition is the fact that Ethereum is the preferred coin for transferring funds across the crypto-verse for trading and funding ICOs. This is attributed to Ethereum’s reputation for transferring funds in a considerable fast time.
However, with the implementation of SegWit and the Lightning network, Bitcoin is making a comeback in terms of improved transaction speeds. But this update might be a little too late for ETH has become the favorite of many including Wallstreet.
Imagine all those Wallstreet guys wanting to trade on the new Poloniex under Circle. They will all have to have their USD funds converted to a cryptocurrency and Ethereum is likely to be the coin of choice.
This Ethereum will then be transferred to the Ethereum wallets on Poloniex since the exchange does not have a direct USD to Cryptocurrency conversion capability. Perhaps with the promise of a better customer experience by Poloniex, shall we see such a capability on the exchange.
In summary, the new entry by Circle into cryptocurrencies by acquiring Poloniex will definitely excite the markets as it will probably bring in the heavy hitters from Wallstreet into Cryptocurrency trading. In addition, Circle’s biggest funding institution when the company was being formed, was Goldman Sachs. This link of Circle with a financial giant will definitely cause a price surge of all coins but Ethereum is sure to benefit the most.