A Simple Reason Why VCs Continue To Pour Money Into Bitcoin Companies

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Late this week a number of Bitcoin funding announcements were made. Specifically, Chain closed a $30m round, Bitcoin hardware wallet maker Case closed a $2.25m round, Coinalytics closed a $1.1m round and bitcoin powered P2P remittence company Abra closed a $12m round.

Over the last few months many have (again) heralded the likely demise of Bitcoin. With the continued concerns over governance of Bitcoin Core and the fork ‘threat’ it seems, at first blush, very odd that VCs continue to pour money into Bitcoin based companies.

Moreover, speaking to the casual Bitcoin observer, many seem to see the value in ‘blockchain technology’ but are quick to dismiss Bitcoin (both the currency and protocol). However, oddly, VCs continue to fund Bitcoin companies at a prodigious pace. In this regard, the natural question becomes ‘why?’

Although, there may be a number of answers to this question (e.g. FOMO) the answer might be quite simple.

If one looks at the smallest market that Bitcoin could disrupt (e.g. micro-tipping) its size could easily be measured in the billions (if not trillions). Further, at the moment if you look closely at the space it’s almost all blue sky. In fact, in most instances there are only 2-4 companies fighting it out. To many VCs this must be an attractive proposition.

Regardless of the reason, the Bitcoin (and Bitcoin Blockchain) investment space continues to run hot this year. Although, the permissioned blockchain set make a lot of noise, the current state of play is that the Bitcoin Blockchain is the one getting all the capital – and probably will for the foreseeable future.

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