In the first half of September, almost $50 million were invested in cryptocurrency startups. The lion’s share was taken by Chain and Abra. Evidently, the venture capitalists are not disappointed in bitcoin.

A little more than a week ago, the situation seemed gloomy for bitcoin startups. In August 2015, investment in cryptocurrency reached its low point since April 2014, with a total of only $9 million. It led some reviewers to suppose that venture capitalists are disappointed in bitcoin seeing they cannot expect high returns because of the current price of bitcoin, its slow rate of adoption and imperfect business models of most bitcoin companies. The analytics also pointed to the fact that venture capitalists are now more interested in blockchain startups than in companies working with the virtual currency itself.

However, now it appears that it was just a seasonal pause. During the first two weeks, cryptocurrency startups raised almost $50 million. Venture capitalists, angel investors, banks and Wall Street companies all decided to put some more money in bitcoin business.

Of these, $30 million have been invested in Chain Inc., a San Francisco company that provides bitcoin infrastructure including asset management platform for entrepreneurs and financial institutions. The company focuses on transferring assets using the blockchain. Abra, with more than $14 million, comes second. It is a bitcoin remittance company planning to create a network of tellers who would convert bitcoins into fiat currency removing the need in bitcoin ATMs. Four other startups raised sums ranging from $1 to $1.6 million: Coinalytics, a startup specializing in blockchain analysis, Chronicled, a company aiming to verify the authenticity of consumer goods with the help of the blockchain, Case, a hardware bitcoin wallet manufacturer, and ShapeShift, a digital currency exchange.

Evidently, venture capitalists have not lost their interest in cryptocurrencies. Judging from our sample, we cannot even say they are more interested in blockchain than in bitcoin itself. Of six cryptocurrency companies that received investments in the first half of September, three (ShapeShift, Case and Abra) are more focused on bitcoin the currency and other three (Chain, Chronicled and Coinalytics) are working with the blockchain.

CoinFox will continue to monitor the bitcoin investment climate.


Alexey Tereshchenko