Bitcoin May Be Down, but a Digital Currency Startup Still Soars

By Telis Demos 

A digital-currency startup backed by Goldman Sachs Group Inc. is now worth about $3 billion after a new fundraising round.

Circle Internet Financial Ltd. disclosed the new valuation Tuesday, making it one of the most highly valued financial technology startups in the U.S.

The increase in the Boston-based trading firm's value, more than seven times the level achieved at a prior fundraising in 2016, stems from the recent explosion of interest in bitcoin and other so-called digital assets.

Indeed, despite a 40% decline this year, bitcoin is still making fortunes for companies that deal in the volatile currency. In particular, it shows how some of the biggest winners from last year's 1375% surge in bitcoin, which was bested by other tokens including ether, may be the service firms that have formed to facilitate cryptocurrency trading and investment.

Those firms include Coinbase Inc., the most popular consumer bitcoin wallet, and Bitmain Technologies Ltd., a Chinese builder of computer chips for digital currency transactions that is leading the $110 million investment round in Circle announced Tuesday.

The fundraising, one of the largest ever among crypto startups, also includes new investments by venture-capital firm Blockchain Capital and Tusk Ventures, as well as more money from existing investors IDG Capital, Breyer Capital, General Catalyst, Accel and Digital Currency Group. Goldman is not among the new round's investors.

Five-year-old Circle's first product was designed for buying bitcoin and moving traditional money between individuals by using bitcoin as a medium of exchange.

But in the past year, its other business, facilitating big trades of digital currencies, has surged in volume and revenue.

That desk, called Circle Trade, says it has traded about $4 billion in the past month, handling trades from institutions, companies and wealthy individuals, Circle said.

Write to Telis Demos at [e-mail]

(END) Dow Jones Newswires

May 15, 2018 16:42 ET (20:42 GMT)

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