Venture capitalists are stepping up the pace at which they are investing in Bitcoin, a powerful sign that the digital currency is on track to fulfill its promise of being the most innovative and disruptive force since the Internet.
According to a running tally on the CoinDesk website, venture capital Bitcoin investments in May alone totaled $56 million, which was nearly as much as the 2014 total through the first four months, $57.24 million.
And just today (Monday), Bitcoin security startup BitGo announced it had raised $12 million in Series A financing from Redpoint Ventures.
Some may be tempted to dismiss $250 million as insignificant, given that venture capital investments totaled $29.4 billion last year, according to PricewaterhouseCoopers.
But what's key here is the rapid acceleration.
A total of $250 million would be nearly three times the Bitcoin investments from venture capitalists in 2013.
"We're still in the very early innings of the bitcoin industry as a whole. If you compare it to the Internet industry, we're probably back in 1995 or 1996 and right now it's all about infrastructure," Pamir Gelenbe, a venture partner at Hummingbird Ventures, told MarketWatch.
In fact, $250 million is about equal to the first-sequence venture capital investments made in Internet-based startups in 1995. (Almost all the investments in Bitcoin startups to date have been early round.)
This is a point that Marc Andreessen, one of the co-founders of venture capital firm Andreessen Horowitz, has made often. Andreessen Horowitz has already invested $50 million in Bitcoin startups and is intent on investing "hundreds of millions" more.
"In 1994, as a venture capital firm, it would have been a good idea to take the Internet seriously and it would have been a good idea to invest in a cross section of [Internet] companies [...] the venture firms that did do that did extremely well," Andreessen said at a Bitcoin event in March.
Of course, not everyone is convinced. It's not hard to find opinions on Bitcoin that deride the digital currency as a bubble or worse, a scam.
So what are venture capitalists seeing that has convinced them to pour ever-increasing amounts of money into Bitcoin? Take a look…