The Bitcoin Newsletter #6 - Venture capital
Trammell Venture Partners, University of Utrecht, Bitcoin Block Munich, Swiss Bitcoin Conference & StartUp Research.
Welcome to the 6th edition of The Bitcoin Newsletter
With bitcoin you are not forced to invest money to offset monetary inflation as you have to do with fiat money. This is because it increases in value over time due to its scarce supply, high quality and high demand. With near-perfect money like bitcoin, all other tools for maintaining purchasing power become obsolete. However, investing in Bitcoin companies could potentially at times outperform bitcoin the asset. Most importantly, investing in Bitcoin companies helps create use cases for Bitcoin, which has a positive impact on the development of the Bitcoin ecosystem.
Since holding bitcoin no longer requires investing to offset monetary inflation, almost exclusively companies that bring real value to the market receive venture capital in the Bitcoin space. This is because people are very careful before they invest. Ghost companies like We Work that bring absolutely no added value to the market and are financed by cheap loans rarely exist in the Bitcoin space.
Additionally the volatility of bitcoin, means that companies are constantly being tested in the turbulence of the marketplace. This has resulted in a highly efficient and competitive Bitcoin market environment. The Austin, Texas based Trammell Venture Partners, one of the first pure Bitcoin VCs, published an excellent in-depth analysis and snapshot of the Bitcoin startup landscape, which I want to share with you in this edition of the newsletter.
Best regards,
Leon
DEEP DIVE
Trammell Venture Partners releases Bitcoin VC market research
The report from our friends over at Trammell Venture Partners (TVP) is the first-of-its-kind research on the growth of the Bitcoin startup ecosystem compared to that of crypto over the past two years, using proprietary data they have collected. Trammel was one of the first venture firms formed to provide venture capital for Bitcoin companies and as such has the experience needed to evaluate the Bitcoin-VC ecosystem.
Contrary to popular belief that Bitcoin is boring, there is an incredibly interesting and complex Bitcoin focussed startup ecosystem. Like the Internet, Bitcoin will accompany every aspect of our lives. The companies that will set up the relevant infrastructure and offer services are currently being established. Going forward, these will be among the most valuable and important companies in the world.
What most “crypto” investors fail to understand is that the innovation and future productivity associated with it resides in Bitcoin and not the blockchain itself, which is only a small but crucial part of Bitcoin's technical innovation. This misunderstanding is a result of decades of loose monetary policy, which has left market participants with a distorted view of reality and unable to allocate capital properly. However, I find it fascinating that in a market environment where Bitcoin is in a bear market, investment in Bitcoin startups is at an all-time high. This shows the growing willingness of investors to allocate capital to the Bitcoin ecosystem. In addition, the diversity of the start-up landscape shows that there are great applications of Bitcoin ahead of us. The Internet of Value is beginning to unfold.
If you want to delve deeper into the topic, I highly recommend reading Trammell Venture Partners' research in full. Below are some interesting points you will find in the report:
Despite the broad crypto market drawdown in 2022, the Bitcoin sector saw a 52.9% increase in deal activity year-over-year. Real value is being build.
133% increase in seed funding for Bitcoin-native startups. Bitcoin applications are coming!
70% YoY increase in total companies funded
Only 1.3% of total crypto venture dollars went into early stage Bitcoin startups despite 42%+ market cap dominance. This is a sign of the misallocation of capital happening in the broader crypto space, while also providing an opportunity to invest on favourable terms in companies that will transform our world. REPORT
WORTH TO KNOW
University of Utrecht
On behalf of EuropeanBitcoiners.com, an educational initiative offering free Bitcoin education in all major European languages, I had the pleasure of speaking about the Austrian School of Thought, Economics and Bitcoin at Utrecht University on Wednesday April 26th. I was invited by the Finance Committee to speak to the students of the Master in Financial Management course along with Derek Pennings (Bitcoin Self Custody) and Bert de Groot (Bitcoin Mining & Energy). It was exciting to give the students a different perspective to the Keynesian "view" they have been taught. WATCH
Bitcoin Block Munich
The opening of the Bitcoin Block in Munich is scheduled for this weekend. The space is an exciting new initiative located in a high-traffic shopping centre in Munich featuring global brands. This physical space is one of the first of its kind in Germany, offering an immersive Bitcoin experience for retailers, businesses, and individuals. On May 4th, I will have the pleasure of joining the popular Zeitsprung Bitcoin Podcast for a special live podcast at the Bitcoin Block.
On May 5th I will join Daniel Wingen. He is part of "21", a decentralised community in Germany that organises Bitcoin meet-ups, events and other activities, for a live fireside chat at the opening of the Block Munich. We will discuss how Bitcoin can help businesses hedge against the turmoil we are currently experiencing in the traditional banking system. I look forward to sharing my expertise on how companies can effectively integrate Bitcoin into their strategies for long-term success. This is a unique opportunity to inform and inspire individuals. WEBSITE | TEASER
Swiss Bitcoin Conference
I have just returned from the Swiss Bitcoin Conference launch. At the conference, the Bitcoin Block Munich was awarded in the education category. It was proof that the Bitcoin community is growing rapidly throughout Europe. Even though we haven't developed as fast as the community in the US, we're clearly on the right track.
I'm looking forward to attending a number of conferences in Europe this year and doing everything I can to strengthen the community. Bitcoin is a grassroots movement. Bottom up. We don't need help from central institutions. Just mutual support. LINK
IDEAS OF INTEREST
Robert Breedlove & Erik Cason - Bitcoin and Cryptosovereignty with Erik Cason (WiM293) WATCH
Lyn Alden - Implications of Open Monetary and Information Networks READ
The monetarty properties of Bitcoin READ
If you want to support me. Feel free. You can send me some satoshi/bitcoin.
My lightning address is: law@getalby.com
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Photo Credit: MemeingBitcoin
Disclaimer: the content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Make sure you do your own research before making any investment and be aware of your own risk tolerance. If you like to build on my thoughts, feel free, but please cite me as the source. 2023 - Leon A. Wankum.