Today you can't buy a Bitcoin stock on the Nasdaq or New York Stock Exchange, but that could change as soon as next year if Bitcoin mining hardware maker BitFury can make its aspirations come true.
Based in both San Francisco and Amsterdam, BitFury's bread and butter is the Bitcoin mining hardware it designs, particularly specialized chips known as ASICs (Application Specific Integrated Circuits). That makes it a classic "pick-and-shovel" company, even though it has branched out into other aspects of Bitcoin mining.
Those other activities include selling fully hosted and managed solutions to other crypto-mining firms in addition to running its own mining operations in Finland, Iceland, and the Republic of Georgia.
A few weeks ago BitFury snagged $20 million in first-round venture capital funding from a group that included Binary Financial, Crypto Currency Partners, Georgian Co-Investment Fund (GCF), Queensbridge Venture Partners, and ZAD Investment Company. Angel investors Bill Tai, who has invested in such companies as Scribd and Twitter Inc. (NYSE: TWTR), and Jonathan Teo also joined the round.
A first-round startup seems an unlikely candidate to be the first Bitcoin IPO and publicly traded Bitcoin stock on a major exchange.
But that's exactly what BitFury Chief Executive Officer Valery Vavilov has promised.
"The success of this funding round validates our strategy and brings us closer to our aspiration of becoming the world's first publicly listed Bitcoin company," Vavilov said.
And George Kikvadze, managing director of Georgian Co-Investment Fund and a member of BitFury's board of directors, took it a step further, telling The Wall Street Journal that the company would like to have its IPO next year.
As audacious as BitFury's top management sounds, they have a solid chance at making good on their vow to become the first Bitcoin stock.
Certainly, the company has made a strong impression on its first-round investors.
"I'm a data center geek, and I really like how they designed it," angel investor Teo told The Journal. He called the founders a "hustle team."
And for such a young company - BitFury was only founded in 2011 - it is doing surprisingly well.
BitFury's Case to Become the First Bitcoin Stock
Kikvadze told The Wall Street Journal that BitFury had revenue of approximately $30 million in 2013, which he expects to increase sevenfold to $210 million this year.
The first round of venture capital funding put BitFury's valuation at $250 million.
As for its business prospects, BitFury has established a strong reputation in the Bitcoin mining community for having some of the most powerful ASICs available - making the company a dominant player in the market. (The more powerful the chip, the more bitcoins can be mined per day.)
And Kikvadze recently told CNBC that BitFury is working on a "revolutionary" chip due out later this year that he expects will maintain the company's leadership position.
And BitFury's leadership team is incredibly hungry. Kikvadze told The Journal that the company is also looking at acquiring other Bitcoin companies, even at this early stage of its existence. And BitFury is not just looking at buying other Bitcoin chipmakers, but at those who provide Bitcoin wallets and even Bitcoin exchanges.
Georgian Co-Investment Fund CEO George Bachiashvili told CoinDesk that his fund did its due diligence before deciding to back BitFury and believes the company will be among the Bitcoin winners, if not the first Bitcoin stock.
"We've done several stress tests of the company and included that into our calculations and they have proven to be pretty stable even at a low Bitcoin price, it would have to go down close to zero in order for us not to recover the loan," Bachiashvili said.
But if Bitcoin takes off over the next two to three years - as many believe it will - BitFury will be ideally positioned to profit.
And if BitFury does launch a public offering just as Bitcoin is going mainstream, it could easily generate an IPO frenzy on the scale of Facebook Inc. (Nasdaq: FB) and Twitter.
What's even more exciting is that whether or not BitFury is the first Bitcoin stock, it won't be the only Bitcoin stock. The current wave of venture capital pouring into Bitcoin companies is merely the prelude of what's to come.
Stay tuned.
Would you invest in a Bitcoin stock like BitFury when it goes public? Why or why not? Share your thoughts on Twitter @moneymorning or Facebook.
UP NEXT: While we have to wait until next year for a bona fide Bitcoin stock, there are going to be existing companies that stand to gain from the adoption of Bitcoin over the next few years. These Bitcoin winners will ride the digital currency to profits...
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About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.