Why is Investing in Bitcoin Startups so Attractive?
Today, Bitcoin is not widely used by wealthy people. There is an opportunity for it to become as popular as futures, obligations, and shares. This huge potential offers an opportunity to invest in a startup. They in general are much more risky than other types of entrepreneurship. Only one third of new companies succeed and survive the first few years of operation. It is mainly due to their ideas, which are new, and no one can be certain whether the ideas will actually be successful. Bitcoin related firms are in the same position. Moreover, there is an uncertainty about the currency’s future, especially in countries such as China. An interesting fact is that investment in Bitcoin did not decline even when the currency had fallen below $400 per coin. Moreover, according to Bitstamp’s data, investors actually increased their investment in new firms when the price fell in 2014. These issues are not such a big problem for those who’d like to invest in Bitcoin startups, which are growing substantially.
Types of Startups
Startups are small companies, which in this case, are related to Bitcoin systems as a whole. Bitcoin related companies might for example provide a service, which makes Bitcoins easier to use by ordinary people and customers. Moreover, it usually has a high amount of their income that is invested in Bitcoins. Such startups may work in different areas of business. It could be a new, innovative, highly secure online wallet. It may be a new, modern data provider or a mining pool. It could even be a well-known cryptocurrency exchange. Most of these are quite new and even though they are well established and successful, most of them require funding to develop their business. It’s a very important need for this type of business. There is a demand; therefore there are going to be offers. How did they find the funding? How did they receive it?
One such company is Seedcoin. Seedcoin’s main purpose and business plan is to supply young Bitcoin businessmen. In other words this is a business incubator. Its aim is to find, select and help to grow promising firms. Seedcoin helps them to get the necessary funding by selling shares in a special trust. This fund consists of a list of promising small companies. An investor, having bought shares in the fund, then receives dividends or has the option to sell them when its value increases. Seedcoin is searching for companies to build a Bitcoin infrastructure, making it more usable, comfortable, and convenient for people to use. This may also involve companies, which are not located in the United States due to circumstances such as high legal costs or charges.
Seedcoing is not the only option. There are enough companies and venture funds which are interested in new businesses. An example being a Singapore-based company that is going to improve the situation with Bitcoin making it a normal part of the finance world. They plan to lead NASDAQ’s funds to Bitcoin economy. Companies such as the BitFury Group raised approximately $20 million. Blockstream raised more than $21 million and Blockchain raised almost $30 million. You will agree that these are impressive numbers. As a whole, investments in hi-tech companies exceeded $400 millions in 2014 with 2015 promising to even better.
Bitcoins future appears to be very bright if those with significant funds to invest have faith in its development.
You could say that the Bitcoin economy will continue to grow. Businessmen have invested in Bitcoin startups in the past and today they continue to do so.
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