2013 was the year that Bitcoin went mainstream. Bitcoin has been up against some seriouschallenges but has proven to be resilient and here to stay.
- The price of bitcoin grew 56X in 2013 from $13.51 to $756.79 on the MtGox exchange
- The first ASCI mining rigs were shipped 1/31/13 fueling bitcoin’s explosive growth to a $1 Billion market cap on 3/28/13
- The infamous Silk Road was shut down and assets seised by the government on 010/2/13 leading into China’s Bidu beginning to accept bitcoin as payment. US Congress hearings brought bitcoin into the limelight fueling a massive run to over $1,000 per bitcoin on 11/27/13. A few weeks later, China told it’s banks and payment processors to stop accepting bitcoin as payment ending the year in a negative tone.
- The total VC investment in the bitcoin startup ecosystem totaled $98 million in 2013 with Coinbase’s $25 million investment leading the pack.
- Regulatory pressure remains mixed with the US being the most lenient of them all.
- Younger exchanges emerged to unseat MtGox’s dominance as BTC China dethroned MtGox which was later passed by Bitstamp
- Growth in merchant and consumer adoption has grown dramatically as people see Bitcoin as not just only an investment
- The rise and fall of bitcoin’s value has garnered widespread media attention
- There is a lot of important disruption happening all at the same
- Marc Andreeesen compares bitcoin to the rise of the PC!
- Price & Valuation
- Bitcoin ended the year with a market cap of $9.2 billion and hit a high of $1,147.25 with an average price of $188.58
- There’s a strong correlation between the number of times bitcoin is mentioned in the media and its value
- The end of 2013 saw huge growth of overall transactions and transaction value
- Wallstreet is beginning to take notice of bitcoin
- Wedbush sees scenarios where bitcoin could be worth 10-100x its current value
- New ways of investing in bitcoin are emerging
- Bitcoin represents 76% of all the altcoin values combined
- There are $314 billion worth of industry disruption to be had
- Media & Brand
- At the beginning of 2013, bitcoin was seen as shady…
- At the end of 2013, Ben Bernanke was chiming in on bitcoin’s potential
- Search interest spiked considerably in April and October of 2013
- “Bitcoin Mining” remains the most searched bitcoin related keyword of 2013 with “coinbase” growing the most
- Interest in bitcoin is strongest in the US
- The search interest for bitcoin is globally distributed
- Many apps, conferences and services emerged to make the virtual currency “tangible”
- Bitcoin is going mainstream
- There were many noteworthy bitcoin conferences held through out the year
- And there will be many more bitcoin conferences in 2014
- Ecosystem
- Bitcoin payment companies can be grouped into 6 main categories
- China holds some of the largest exchanges with the US still yet to enter the market in a meaningful way
- Mt Gox dominated trading volume for the first half of 2013
- BTC China dethroned Mt Gox in November
- Followed by Bitstamp outgrowing them all in December
- 90% of transaction volume happens on 4 exchanges with 77% occurring in USD
- Different bitcoin wallet types have emerged
- Blockchain being the largest wallet followed by Coinbase
- Bitcoin hacks and fraud remain to be a serious problem
- Over 3,000 merchants began accepting bitcoin in 2013
- Everything from social gaming currencies to space flight can be bought with bitcoin now
- The top bitcoin payment processors are coinbase and bitpay
- Over $200 million was invested in bitcoin mining equipment in 2013
- Bitcoin ATM operators emerged
- Venture Capital and Mergers and Acquisitions
- Many top VS’s are weighing in and putting their money where their mouth is
- Peter Tiel likes to think of money as a bubble that never ends
- 81% of all bitcoin VC investments have come from North America but only 60% of the money has been invested in American companies
- The greatest number of bitcoin companies are based in the US and China
- More than half of bitcoin VC investments have happened in Silicon Valley
- 38% of VC investments have been in the payment processing space
- 2014 is shaping up to be a big year for VC money flowing into bitcoin
- $77.5 million of VC investments in bitcoin happened in 2013
- $98 million total has been invested by VC’s in bitcoin to date
- Coinbase raised $600 way back in 1/9/12
- Not many M&A deals… yet…
- Tech & Mining
- New features of the bitcoin software are set to be released with 0.9
- What features will “make it” and which will be cut is yet to be determined
- There are still many innovative use cases for bitcoin which remain unexplored
- Bitcoin’s network speed exceeds 14 petahashes per second up 560x from last year
- Mining pools dominate the distribution
- $319.4 million of bitcoin was mined in 2013
- However, mining revenue is falling…
- Regulation & Risk
- Bitcoin is attracting regulatory attention
- Russia has declared all out war on bitcoin
- Only 13% of countries have issued regulatory guidance
- Bitcoin continues to face many challenges
- Remember Occupy Wallstreet?
- Bitcoin’s distribution curve shows half of all bitcoin owned by 927 people
- But bitcoin still has a lot going for it
- Alt Currencies
- There are 4 types of alt currencies – physical historical, physical contemporary, digital historical and digital contemporary
- 7 forces are driving alt currency
- Ever heard of the Brixton? Bitcoin can learn from it.
- There are many alt coins and new one pop up every week
- Litecoin has been called the silver to bitcoin’s gold
- Dogecoin started off as a joke but has since grown into a force to be reckoned with
- Namecoin has suffered significant technical challenges but has an interesting perspective
- Worldcoin claims to be FAST!
- Peercoin is blazing its own trail
- Ripple is a payment network and a currency with no mining required
- Thats all folks!
- Many thanks to CoinDesk for putting together this incredible presentation.
