When the San Francisco-based Bitcoin startup Coinbase closed a $25 million funding round led by Andreessen Horowitz last December, it marked a coming of age for the digital currency. The price of a bitcoin had hit $1,000, and a fledgling industry that had long been populated with libertarian true-believers, a few committed techies and some adventurous investors had suddenly become mainstream in Silicon Valley.
Bitcoin’s price has since fallen back down to earth. (Monday it hovered around $575.) But venture capital firms’ desire to invest in companies that can build businesses around Bitcoin has not abated. Coinbase Statistics—part of the Bitcoin-focused media organization Coindesk, a Bitcoin startup in its own right—calculated that in 2012 investors put $2.1 million into Bitcoin businesses; in 2013 that jumped to $88 million. As of June 2014, the count had already exceeded last year’s total, hitting $113 million.