What Venture Capitalists Got Wrong About Bitcoin
Of the over $1 billion venture capitalists have invested in blockchain businesses, that funding has focused primarily on bitcoin, since for years that seemed like the only option. But with the arrival of Ethereum and a surge of alternate coins and tokens such as Zcash into the market, the landscape is looking very different from what those investors signed up for.
Significant investment in bitcoin startups began in 2013, the year the value of the currency crossed the $1,000 mark before suddenly plummeting. With some wariness, investors returned and put $299 million into bitcoin companies in 2014 and $474 million in 2015.
Mostly, venture funding in this period went toward bitcoin wallet and exchange startups in geographically diverse areas. These companies focused on creating on-ramps and off-ramps for using the currency in jurisdictions where such trades are legally compliant, integrating with banking systems in those locations for more efficient payment pipes.
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