State of Bitcoin Q1 2015: Record Investment Buoys Ecosystem

CoinDesk is pleased to announce the latest State of Bitcoin report, which focuses on events in the bitcoin ecosystem since the beginning of 2015.

AccessTimeIconApr 10, 2015 at 4:10 p.m. UTC
Updated Sep 14, 2021 at 2:01 p.m. UTC

CoinDesk is pleased to announce the latest quarterly State of Bitcoin report, sponsored by, a bitcoin platform for developers.

This article runs through some key findings from the new report, which focuses on events in the bitcoin ecosystem since the beginning of 2015.

All-time bitcoin startup VC investment reaches $676m

The first quarter of 2015 saw a record-breaking amount of venture capital invested in bitcoin startups: $229m.

Q1's deal activity was led by 21 Inc and Coinbase, companies that received $116m and $75m respectively. These are the two largest bitcoin investment rounds made to date.

With a funding total of $121m, 21 Inc has now surpassed Coinbase as the best-capitalized startup in bitcoin. However, very little information is available about the firm beyond its confirmation that it meets the definition of a 'universal' bitcoin company* (Slide 27).

Since 2012, a total of $676m (Slide 29) has been invested in bitcoin startups, with a 51% increase from the end of 2014.

slide 29
slide 29

The number of countries that received VC investment also grew from 18 to 22 in the first quarter of 2015.

The four new countries are Barbados, France, Kenya and Switzerland. Remittance platform BitPesa also became the first bitcoin startup based in Africa to receive VC funding.

Since the start of our State of Bitcoin reports, we have aimed to quantify the well-worn statement that 'bitcoin is like the the early Internet' by comparing levels of VC interest between the two.

Our last report indicated that total VC investment for bitcoin companies in 2014 well exceeded the $250m invested in first-sequence Internet startups in 1995.

Looking ahead (Slide 30), this year’s total VC investment in bitcoin startups is currently projected to surpass the $638m invested in first-sequence Internet startups in 1996.

Bitcoin's price stabilizes after rocky start

Overall, the bitcoin ecosystem showed robust growth in the start of 2015, despite the price plunge in the first half of January. Bitcoin’s price surprised many by breaking below $200, considered to be an important psychological marker.

On 14th January, the CoinDesk BPI dropped to $177, and is down 24% in 2015 (Slide 11).

slide 11
slide 11

Although bitcoin saw a significant decline at the start of 2015, its price has since stabilized around $250. In turn, the upward trend in monthly trading volume has not been negatively impacted by bitcoin's price decline (Slide 12).

This could be a reflection of expanded opportunities to trade on both bitcoin's upward and downward volatility.

slide 12
slide 12

Bitcoin's price action appears to be attracting less attention. For example, the number of price-related stories in the 10 most popular articles on CoinDesk has dropped significantly, from seven in Q3 2014 to only two in this quarter (Slide 21).

Bitcoin struggles to gain mainstream consumer traction

The rate of growth in the number of bitcoin-accepting merchants continued to taper off this quarter (Slide 47). Discussions around the slowdown of merchant adoption suggest the fundamental problem is not a lack of merchant interest in bitcoin, but rather the lack of consumer adoption.

There were 1 million new bitcoin wallets created in Q1, representing 14% growth quarter-over-quarter. The total number of Blockchain wallets passed three million in February.

The pace of wallet growth is almost constant over the past year, leading to some concern about the credibility of these numbers and questions about how many wallets are actively used for bona fide transactions.

CoinDesk is forecasting 12 million total bitcoin wallets by the end of 2015 (Slide 53).


The technology underpinning bitcoin is beginning to be deployed in many non-currency applications like property rights, smart contracts, notary services and voting.

Companies both in and outside these industries are seeking to understand how the properties of the blockchain could help reshape these services and improve efficiency (Slide 61).

A new update to Bitcoin Core Protocol was successfully released this quarter with new efficiency-enhancing features, such as a consensus library and headers-first syncing (Slide 72).

Positive signs from Wall Street and regulators

Wall Street's interest in bitcoin expanded this quarter as more financial services executives moved to bitcoin startups (Slide 77).

slide 77
slide 77

Leading financial institutes like Citi and UBS are also starting programmes to explore the use of blockchain technology. These developments may have bitcoin companies secure partnerships with traditional finance.

The latest revision to the New York BitLicense regulations was released this February (Slide 80). While there were some positive developments, some of the requirements are still being viewed as ‘redundant and duplicative’.

The UK Treasury also announced a new cryptocurrency regulatory framework this quarter. The proposal is generally being viewed as positive and in-line with the UK's hallmark ‘light touch' approach to financial regulation.

If you found the 2015 State of Bitcoin report useful, you can view more of CoinDesk's Research Reports here.

We'd like to thank all our readers for making CoinDesk the world’s leading source of bitcoin news, analysis and perspective, and we welcome your feedback and ideas for our future reports.

Sincerely, the CoinDesk team

Note: You can access CoinDesk’s full spreadsheet of all bitcoin venture capital deals here.

Disclaimer: This article should not be viewed as financial advice or an investment recommendation. Please do your own extensive research before making investment decisions.

* A pure-play bitcoin startup is primarily focused on one particular function, such as serving as a wallet or exchange. A universal bitcoin startup fulfils multiple elements of the bitcoin value chain. For example, Coinbase is all of the following: a wallet, payment processor, exchange, and therefore meets the definition of a universal.


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