|What Venture Capitalists See In Bitcoin, Ethereum, Litecoin And Other Digital Currencies|
Once, cryptocurrencies like Bitcoin, Ethereum, and Litecoin were popular among digital currency collectors—usually young technology savvy investors—enchanted with the promise these currencies offer to solve the ills of a global economy. Like the monopoly of printing money by central banks.
More recently, cryptocurrencies have become popular with venture capitalists, as a way to quickly and easily amass big fortunes, much faster than investing in conventional start-ups.
How do they do that? Through Initial Coin Offerings (ICOs), an alternative to crowdfunding that converts cryptocurrency profits into Bitcoin and other major cryptocurrencies, and eventually into fiat money, ie legal tender.
In 2016, for instance, venture capitalists saw their investments in Monero and NEM soared 2000 percent. In March 2017, Ether doubled in value in just three days. Then there’s Tezos blockchain project ICO, which has raised a record of $232m-worth of bitcoin and ether.
And the list gets longer by the day—see icorating.com. Among the early investors was legendary venture capitalist, Tim Draper of VC fund Draper Fisher Jurvetson, according to the same source, which has added to the cryptocurrency hype.
And, of course, there are the Bitcoin Investment Trust Shares that began trading in the OTC market late last year, gaining 290.48 percent, so far in 2017, leaving gold in the dust.