Yesterday, the Wall Street Journal reported that Coinbase has raised $5 million, which represents the largest funding round to date for a Bitcoin startup. The funding is being led by the highly respected Union Square Ventures, and despite the fact that 90% of financial “journalists” and mainstream “economists” continue to bash Bitcoin as a bubble and a ponzi scheme, some of the brightest minds in venture capital are getting involved. From the Wall Street Journal:
Eleven-month-old startup Coinbase announced Tuesday the largest funding round to date for a Bitcoin startup, a $5 million investment led by Union Square Ventures.
Coinbase is an online platform that allows users to buy Bitcoin, the virtual currency taking the tech world by storm. Users can also store Bitcoin in a digital wallet and pay merchants for goods or services with it. About 300 merchants have signed up with Coinbase so far, including content-aggregation site Reddit.com and dating siteOKCupid.com.
In April, Coinbase’s co-founders said the company claimed about 116,000 members who converted $15 million of real money into Bitcoin, up from $1 million in January. Ehrsam said the volume of dollars it’s converting to Bitcoin is increasing at a rate of about 15% a week, and its user base is growing at a weekly rate of about 12%.
Bubble! Stay away!
He added that he thinks Bitcoin is poised to be a true game-changer for the business world, and the tech community in particular. “Hackers are the animals that can detect a storm coming or an earthquake,” he said. “They just know, even though they don’t know why, and there are two big things hackers are excited about now and can’t articulate why–Bitcoin and 3D printing.”
Wilson said that Union Square has looked at about a dozen Bitcoin startups over the past two to three years but that Coinbase is its first investment in the space so far. “There is no magic bullet that they have,” he said. “They have competitors doing the same thing. We just really liked their approach to the business and the product they built.”
Coinbase’s founders, he added, are “very pragmatic, level-headed engineers.”
“Digital currency and Bitcoin specifically is a very interesting area where if one were to get it right, the upside would be enormous,” he said. “If Bitcoin really becomes the global currency that every country and every business accepts, and Coinbase becomes the JP Morgan Chase of Bitcoin, that could be worth a lot of money.”
Micky Malka, founder of Ribbit Capital, one of Coinbase’s other Series A investors, said he likens Bitcoin and its skeptics to when the Internet started becoming popular in the early 1990s. Back then there were “a lot of articles about the Internet being a place for porn,” he said, similar to how early Bitcoin adopters have been allegedly using the currency for illicit purposes, such as to buy and sell illegal drugs.
I love all the Bitcoin bashing. It’s just further evidence as to how early we are in this whole exciting process and how much opportunity there still is.
Full article here.
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