Betting on Bitcoin

Despite the slump in the number of bitcoin financings, VC invested has steadily climbed in the past few quarters, implying that not only are rising valuations depressing activity but the space may be maturing, with a few frontrunners emerging. The number of bitcoin transactions is a useful comparative in this case, as even if bitcoin's nominal price has fallen, its usage volume tells a different story. More may be willing to transact in bitcoin as its relative expense lowers, and the startups capturing most of that increased usage are likely to find VC backing.

Market capitalization of bitcoin is a useful heuristic for VC investment, as it illustrates usage and relative dollar value. The juxtaposition of bitcoin startups and their relevant financial details with bitcoin's market cap clearly shows which companies are the current frontrunners (from a VC perspective). In fact, Coinbase's $490 million valuation after its recent $75 million Series C is no less than about 15% of the cryptocurrency's entire capitalization.

(Click next for a closer look at the plethora of up-and-coming bitcoin startups crowding the bottom.)

Market capitalization of bitcoin is a useful heuristic for VC investment, as it illustrates usage and relative dollar value. The juxtaposition of bitcoin startups and their relevant financial details with bitcoin's market cap clearly shows which companies are the current frontrunners (from a VC perspective). In fact, Coinbase's $490 million valuation after its recent $75 million Series C is no less than about 15% of the cryptocurrency's entire capitalization.

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