The year 2015 has been quite an interesting time for Bitcoin and any company active in the cryptocurrency industry. While the total amount of funding from VC’s and business angels has been enormous during the first two-quarters of the year, things have dropped significantly during Q3. What will Q4 hold regarding VC investment? Only time will tell.
Still Improving Compared to 2014, However…
Before people start putting on their conspiracy theory hats, have no fear, as things are not as bleak as some might anticipate. Granted, the total amount of funding has been significantly lower in Q3 2015, but the overall amount is still a 15% increase compared to the same period in 2014. That being said, there are some signs of funds drying up even further.
Bitcoin has always been labeled as a volatile digital currency, and the flow of VC funds seems to follow the same trend. While there was an explosive influx of money during Q4 2014 and Q1 2015, things have started going downhill from April up until this very point. Even investors are a fickle bunch at times, and despite all of their money flowing into the Bitcoin ecosystem, there is very little to show for it at the moment.
That being said, this change might be partially attributed to the lack of volatility as far as the Bitcoin price is concerned. All throughout the first three-quarters of 2015, there has been little to no change in the Bitcoin price. It is impossible to tell whether or not investors lost appeal due to this apparent stagnation, but we will see if the recent price increase increases the VC funding for this quarter once again.
Even larger companies such as BitPay have been facing financial woes and were forced to cut down their staff by a fair margin. Shortly after that decision, BitPay announced their partnership with Kinguin, who are now also accepting Bitcoin payments. Ebbs and flows are a regular part of the business world, and Bitcoin is no exception.
The Bitcoin Ecosystem is Healthier Than Ever
Despite all of these statistics, the interest in Bitcoin itself is not slowing down by any means. In fact, there are far fewer people willing to sell larger amounts of Bitcoin than ever before, which strengthens the scarcity of this digital currency. However, it remains to be seen whether or not the Bitcoin hoarding problem will become worse over time.
Or perhaps the reason is far simpler than that, and Bitcoin’s PR problems are acting up once again. According to Adam Draper, the blockchain is the hot commodity to attract VC funds right now, and Bitcoin itself is not. While one can have the blockchain without Bitcoin – although this is not recommended – you cannot have Bitcoin without the blockchain. Marketing strategies will need to be adapted to strike new common ground with investors.
Regardless of how you want to look at it, venture capitalist funding is not what keeps the Bitcoin ecosystem afloat. The number of Bitcoin users keeps increasing quarter over quarter, which is the main driving factor for the success – or failure – of Bitcoin in the future. Without strong community, Bitcoin will never go mainstream. Luckily for everybody involved, that community is far more robust than most people give it credit for.
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