Adam Draper’s Boost VC Will Focus on Bitcoin Companies

Boost VC, a startups accelerator, has announced it will focus on bitcoin ventures and is going to accept 20-30 bitcoin companies in the next group of startups.

Photo: Boost VC/AngelList

Photo: Boost VC/AngelList

Boost VC, an incubator providing accelerator programs for early-stage startups, announced it will focus solely on bitcoin in the near future.

In March, the company’s CEO Adam Draper first announced the intention to accelerate 100 bitcoin firms through 2017. And now the company stated it will work only with bitcoin startups.

“We are going full Bitcoin! Our team is excited to announce, after raising $6.6m to fund 200 companies, that we will be accepting 20–30 Bitcoin companies into our next Boost tribe. Tribe 5 will consist of 100% Bitcoin companies,” said Mr. Draper.

“Under this umbrella we will be looking at payments, exchanges, block chain technology, Sidechains, and companies that service Bitcoin companies. We are very excited about the focus that this will bring us. Long term we hope to be able to breach other ‘before-the-chasm’ industries, but Bitcoin is our first exciting step,” he added.

Boost VC has previously helped such bitcoin companies as Coinbase, BitWall, BitPagos and Vaurum.

Draper suggest that more mainstream consumers will use bitcoin in order to make secure purchases, avoiding expensive fees charged by banks or credit card companies.

Boost VC stated it plans to fund up to 30 bitcoin companies during the next six months. Draper noted they are more interested in companies based on technologies needed to ensure high customer security.

Some people consider bitcoin is a good investment opportunity and purchase the cryptocurrency, hoping it will escalate in price. The price of bitcoin was over $1,100 at the end of November, 2013. However, its value has dramatically decreased and totaled about $3532 as of Friday.

According to Wedbush Securities analyst Gil Luria, the price of bitcoin depends on the technology behind it and regulation. “When services are built out and there’s clarity around regulations, then we’ll start seeing those very significant benefits and services for consumers and retailers,” Luria said.

One of the biggest problems faced by cryptocurrency users is its price volatility. Lack of adoption is among the main reasons of its price changes.

Today, about 24 million people accept Visa and MasterCard and the amount of daily currency exchanges accounts for $5 trillion. In comparison, only 100,000 merchants accept payments in virtual currency, while the USD/BTC trading volumes total $10 million.

In order to solve the problem of volatility, it is necessary to increase the number of bitcoin users by offering high security and simplifying the process of use. However, the issues of security and ease-of-use are still among the key problems faced by the community.

Meantime, the amount of bitcoin transactions amounts to around 80,000 per day. The cryptocurrency allows merchants to save millions of dollars in credit card transaction fees and chargebacks. In 2013, merchants paid around $260 billion in credit card transaction fees and spent billions more to fraud; this is likely to encourage more merchants to adopt bitcoin.

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