Venture Capital Investment in Bitcoin is Booming in 2015

Venture Capital Investment in Bitcoin is Booming in 2015

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Venture capital is pouring into Bitcoin exchanges and businesses like there’s no tomorrow. In 2013, digital currency related startups received a paltry $25 million in VC funding, 2014 was an entirely different animal. According to figures released by CBInsights, “In total, bitcoin startup investments now total over $400M in aggregate funding. It’s a far cry from Q2 2013, when total funding was under $25M and there were more investors than investor-backed startups in the bitcoin ecosystem.”

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In 2014, the exchange rate of bitcoin against the dollar – was in a steady downtrend for the entire year. Despite the prolific bear market, VC funding has continued to pick up speed well into the end of the year, and into the beginning of 2015. According to Bitcoin VC investment data gathered by CoinDesk, since the start of 2015: approximately $273.8 million has been already invested in digital currency companies. Some prominent Bitcoiners have projected that, total Bitcoin venture capital funding will surpass the one billion dollar mark in 2015.

Just today, the Wall Street Journal announced the big $116 million funding of 21 Inc., by some of the biggest names in the VC arena (Andreessen Horowitz, Khosla Ventures, Data Collective). The San Francisco-based company has been very secretive regarding the nature of it’s business practices. In an interview with the WSJ, CEO and Co-founder Matthew Pauker, made some vague remarks regarding the future direction of 21, “several interesting developments over the next weeks and months”. Pauker also mention 21’s interest in developing tech solutions – that will aid the proliferation of bitcoin into mainstream society.

ShapeShift, an instant cryptocurrency exchange based in Switzerland, also received a £525 thousand pound infusion – from Barry Silbert and Roger Ver. The ShapeShift exchange operates without the need of any client accounts or hot wallet storage of client funds, which has been very problematic – as evidenced by the Bitstamp and BTER breaches. ShapeShift is exclushapeshift-logosively a cryptocurrency exchange, and does not deal with fiat currencies. In a statement to CoinDesk, CEO Erik Voorhees said, “There is a better way. Bitcoin services can be built to significantly reduce or eliminate the need for trust at all … ShapeShift was built as a demonstration of this principle: exchanges occur without custodianship of user funds. Indeed, there are no user accounts whatsoever.”

In January, Coinbase exchange made headline news, after their record breaking $75 million fund raising success. Funding came from the likes of the New York Stock Exchange (NYSE); USAA; BBVA, one of Spain’s largest financial institutions; Andreesen Horowitz; Vikram Pandit, former CEO of Citigroup and many others. In an interview with CoinDesk, CEO of Coinbase Inc., Brian Armstrong said, ”I think this just really changes the conversation. There’s smart money out there that is betting big on this and is totally unphased by the whims of the price and what the market is doing. They’re much more concerned about the fundamentals of what’s happening in the network … and across those metrics, everything is looking great.” The titans of Wall Street and veteran VC investors are not holding anything back – when it comes to investing in Bitcoin. If the VC investment pace in virtual currency infrastructure continues at the same pace, 2015 will be a blockbuster year for Bitcoin.

 

Image Source: Shutterstock

https://shapeshift.io/

Sources: https://www.cbinsights.com/blog/bitcoin-startup-funding-2014/ , http://www.coindesk.com/bitcoin-venture-capital/ , http://blogs.wsj.com/digits/2015/03/10/secretive-bitcoin-startup-21-reveals-record-funds-hints-at-mass-consumer-play/ , http://www.coindesk.com/shapeshift-raises-525k-reveals-erik-voorhees-as-creator/ , http://www.coindesk.com/coinbases-75-million-series-c/

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