The number of startups working on blockchain technology and bitcoin based business have been steadily growing from the past couple of years. However, there has been a slight change in trend in recent days. The new age startups coming up nowadays in the digital currency domain are more focuses towards the blockchain technology than bitcoin as a currency itself. We have seen a number of startups focusing on remittance, banking and financial solutions, blockchain applications for data management and more.
We reported earlier that Digital Currency Group has onboarded four major institutional investors into its operations. If we go by the recent report on VentureBeat, then it might the last of such deals we might be hearing about for some time, especially in the digital currency sector. According to VentureBeat’s recent article, investments in digital currency sector has been on a steady decline since the first quarter of this year. Bitcoin industry saw investments totaling up to $230 million in the first quarter of this year. The following quarters haven’t been as good as Q1 though. Following the steady downtrend, total investments in bitcoin based startups have come down to 59 percent of what it was during the first quarter.
The slowdown in bitcoin investments may be attributed to the low bitcoin prices in the previous months. However, with bitcoin price maintaining an upward trend, there is a strong possibility of bitcoin industry proving VentureBeat’s article wrong. Even though there is some negativity going around due to regulatory issues and the current bitcoin situation in Australia and Russia, the strong bitcoin price currently ranging around $300s and recent ruling by the European Court of Justice which indirectly conferred bitcoin the status similar to that of regular currency are more than capable of countering this negative outlook. Still sticking to the positive side, the over investments in Q3 is still above the investments during the same period last year.
The trend maybe the result of temporary loss of confidence among few investors or the lower than expected bitcoin price during Q2. However, given the fact that blockchain has a lot of real-world applications and the potential to change almost every industry dependant on data and numbers, we would like to think that the sector will flourish for at least a few more years.