Goldman Sachs Invests In Bitcoin Start-Up Circle

Goldman Sachs has become the first major Wall Street bank to invest in the digital currency bitcoin, leading a $50 million (£33m) round of funding for mobile payments start-up Circle Internet Financial.

Boston-based Circle, whose services are based on bitcoin, said Goldman and China-focused venture capital firm IDG Capital Partners contributed to the round, which is intended to help expansion beyond bitcoin into other currencies. Previous investors Breyer Capital, Oak Investment Partners, Accel Partners and General Catalyst, who contributed to the $26m of venture capital raised over the past two years, also took part.

US dollar expansion

Along with the investment, Circle also announced a feature that allows users to hold, send and receive US dollars without a fee.

The investment is a vote of confidence for bitcoin, which has in the past been associated with illegal marketplaces such as Silk Road, and has seen several prominent exchanges go under or lose millions to hackers.

The currency has seen its value drop sharply in recent months, falling from a peak of more than $1,200 per bitcoin in late 2013 to about $239 as of midday on Monday.

Jeremy Allaire, who founded Circle in 2013, called the Goldman investment a “vote of confidence” and added that the mobile payments market is currently a “blank slate” that recalls the early days of the Internet.

Digital transformation

Tom Jessop, managing director at Goldman Sachs, said in a statement that Circle is one of the companies it believes have the “promise to transform global markets through technical innovation”.

“We think that Circle’s product vision and exceptional management team present a compelling opportunity in the digital payments space,” Jessop stated.

Circle launched its first product, a mobile application for storing and transferring bitcoin, last year and says it now has customers “in the six figures” in 100 countries.

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