If you’re concerned that you’re late to bitcoin, insights from The Bitcoin Layer and Trammell Venture Partners tells a much different story. Something that may be lost on relatively stable western nations is that despite price action, bitcoin has been a lifeline for citizens experiencing unstable currency regimes.
“Trading bitcoin as if it were the Nasdaq is a luxury reserved for people in countries with stable currencies,” Nik Bhatia and Joe Consorti said in April edition of their Bitcoin Layer newsletter. Bitcoin use has continued to grow in these countries depsite the bear market.
According to TBL’s newsletter, nearly one in three citizens of countries like Argentina and Nigeria now own and use bitcoin regularly. It also discussed a recently published research report by Trammell Venture Partners, a bitcoin focused venture capital firm.
TVP’s research report highlights the disparity between crypto and bitcoin venture capital investments. Though bitcoin made up 42.1% of the total crypto market capitalization at the end of 2022, it only captured 1.31% of venture capital invested into the space.
TBL attributes this phenomenon to market distortions from zero interest rate policy, claiming that creative destruction is starting to right the ship. Regardless of the cause, the tides are beginning to turn.
“For venture capital dollars allocated in this sector to date, the obvious incentive has been chasing short-term returns,” Said Christopher Calicott, TVP Managing Director said about the disparity between bitcoin and crypto VC investments. He added that the high returns on crypto investments have been largely ephemeral in nature.
Despite 2022 price action, TVP research showed that bitcoin venture deals increased by 52.9%. This serves as a potential signal that sophisticated investors are beginning to recognize bitcoin’s staying power in the face of negative price action.
“The Bitcoin tech stack is increasingly buildable. Founders wishing to build lasting companies have to avoid platform risk. Bitcoin is the clear ecosystem of choice.” Calicott offered as an explanation behind the phenomenon.
Companies like Nodal Power have continued to build in the space, leveraging the Bitcoin Network for productive endeavors like renewable power generation. In their recent press release, Nodal announced a successful $13 million seed round for their landfill gas power plants.
“Everyone is getting more savvy when it comes to diversifying their mining business with power markets,” Bryan Black, CEO of Nodal told me in an interview.
Black offered that mining is becoming more intertwined with wholesale power markets and power plant development. Due to bitcoin’s real-world economic impact, he is unsurprised investments in the space have continued. Black posits that the mining space will continue to have a significant impact on power development for many years to come, especially in the renewable sector.
