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Bitcoin climbs to $10 000 as cryptocurrency finds support

Circle purchase of Poloniex exchange adds to optimism.

Bitcoin climbed back to $10 000 as the purchase of one of the bigger digital token exchanges by a more established financial services company bolstered expectations for wider mainstream acceptance of cryptocurrencies.

Circle Internet Financial, a closely held firm backed by Goldman Sachs Group, said it acquired Poloniex, the 14th largest digital-token exchange. Terms of the agreement weren’t disclosed. Fortune magazine reported earlier that the deal was for about $400 million, citing an unnamed person familiar with the transaction.

Bitcoin gained as much as 4.3% to $10,346, after dropping below the key level last week. Bitcoin has hovered around the $10 000 mark for most of the year, or about half the record hit in mid-December.

“It has a lot to do with this announcement of Circle buying Poloniex as it’s providing some support for the exchange industry,” said Fundstrat’s Tom Lee, who forecasts Bitcoin will end the year at $25 000. “Breaking a big round number is definitely a positive, but from a fundamental perspective, it’s highlighting that developments in crypto this year have actually been positive.”

Circle, which allows users to transfer money via text, said in an statement on its website it will “address customer support and scale risk, compliance, and technical operations to bolster the existing product and platform”.

The cryptocurrency market may also be benefiting from renewed interest in Asia after the recent Chinese New Year holidays, said David Mondrus, chief executive of Trive, a blockchain-based research platform.

“I’m seeing a turnaround on multiple cryptos with volume as it’s the week after Chinese New Year,” Mondrus said. “We’re back to business”.

© 2018 Bloomberg L.P

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