VC interest in digital currency swells as Bitcoin vault Xapo raises $20 million, with valuation rocketing to $100 million


Far from generating a negative investment dynamic following the demise of Bitcoin exchange MtGox earlier this year, and a series of wild price fluctuations, Bitcoin continues to tread its path of widespread acceptance among the more forward-looking investors.

Greylock Partners, a venture capital firm with offices in California’s Silicon Valley and Israel, two of the world’s foremost regions for successful venture capital investment in new concepts which shape the way people live their lives the world over, has provided funding to Xapo, along with Index Ventures, and includes Emergence Capital Partners, Max Levchin, the co-founder of PayPal, Yuri Milner, the Russian billionaire investor, and Jerry Yang, co-founder of Yahoo. Reid Hoffman, a partner at Greylock Partners, and Mike Volpi, a partner at Index, will join Xapo’s board as observers.

The latest investment values Xapo at roughly north of $100 million, according to various commentators, and allows the firm to move forward in issuing Bitcoin debit cards, which will be shipped this month to end users.

Xapo is a form of secure bank within which Bitcoins can be held, allowing owners of small amounts of Bitcoin to use a branded debit card to withdraw Bitcoin on the fly and for institutional investors to put their Bitcoin into a physically secure vault to prevent theft.

“Let us keep in mind that it’s important not to be short-sighted when examining bitcoin. Today, bitcoin is used primarily as a store of value. Soon, it will be a payment mechanism. In the near future it will be a unit of account. We are thankful to be a part of the journey and the ecosystem,” wrote Wences Casares, founder and CEO of Xapo.

The company has also clarified the time frame for its upcoming debit card launch. Cards will be shipped to early customers mid-July “and will continue to ship throughout the coming months,” according to a Xapo spokesperson Dani Metz.

“We have signed deals with financial institutions in the U.S and Europe who will be issuing the cards. We aren’t disclosing those names at this time,” she said.

As far as venture capital investment in innovation is concerned, these seasoned investors have proceeded undeterred by various events that have plagued Bitcoin, including the aforementioned demise of exchanges, last year’s seizure of anonymous market place Silk Road, and various actions by governments outside of the free market which have been aimed at delegitimizing virtual currency.

Indeed, with the launch of SBEX in Switzerland this month and the anticipated proliferation of Bitcoin ATMs in what is widely considered the world’s most secure financial markets economy, and now this emphatic investment in Xapo, Bitcoin appears to have tremendous support from those who quite clearly see a fruitful future for digital currency.

Greylock Partners’ Israel office has funded a number of ingenious start ups which have advanced the cause of the niches within which they operate. Join LeapRate at the forthcoming Forex Innovators conference in September, at which leading Israeli venture capital firms will meet with financial technology leaders from across the globe.

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VC interest in digital currency swells as Bitcoin vault Xapo raises $20 million, with valuation rocketing to $100 million

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