The cryptocurrency bear market has been affecting even the most popular companies in the space. Private shares of Circle, a popular crypto exchange operator, are currently being offered at a massive discount.
According to a recent article released by The Block, Circle’s shares are being offered on SharesPost for a discounted price. SharesPost is a platform that allows investors to exchange shares of private companies.
Shares of the Circle were traded around $16.23 when they held a Series E fundraise back in May 2018. These shares had a valuation of $3.01 billion. However, the shares are now valued close to $3.80 with a valuation of $705 million. It is not clear how many shares are currently being exchanged at this price.
Nevertheless, this shows that there are individuals and investors that see the shares of this company as less valuable than before. A U.K. based cryptocurrency hedge funder explained that it is a combination of liquidity discount, a crypto bear market, low volumes and Circle getting killed on write-down of acquisitions.
Poloniex seems to be performing very poorly compared to other exchanges. In the last 24 hours, Poloniex had a trading volume of $6.05 million, according to CoinMarketCap. Other exchanges such as Binance are currently handling around $547 million in trading volume during the same period of time.
Circle has also an over-the-counter trading business that seems to remain strong during this crypto market. In 2018 it moved $24 billion in notional trading.
The CEOs of the company, Jeremy Allaire and Sean Neville, commented:
“At the other end of the spectrum, our OTC trading business, Circle Trade, has continued to expand despite a tumultuous year for the industry: we on-boarded a record number of new institutional clients (more on that below), grew our trading operations to 24/7 with coverage in the US, Europe and Asia, and added significant workflow improvements, including the launch of our RFQ Electronic API.”
This situation is very strange for market participants. There are several companies that have been affected by these lower volumes, not only Circle. The company is very reliant on the crypto market, this it makes it very hard for investors to value the company.
Bitcoin reached $20,000 back in December 2017 and then it dropped more than 82% during the last year. In December 2018, Bitcoin reached $3,250, the lowest point in more than a year. The whole market capitalization of cryptocurrencies dropped from $850 billion down to $100 a few months ago.
Now, each Bitcoin can be purchased for $3,463 and it has a market cap of $60.67 billion.