Bitcoin’s venture capital (VC) scene is booming, with seed transactions 133% higher in 2021 than 2020 and 70% growth in total companies funded. This growth is a sign of the Bitcoin ecosystem’s early maturation, with a select cohort of Bitcoin startups graduating to the Series B stage or later.
Despite the crypto spot markets declining significantly since the November 2020 peak, Bitcoin VC emerged as a growth category, with 52.9% year-over-year growth. This is in contrast to the overall crypto VC deal count, which effectively stagnated.
Trammell Venture Partners (TVP) believes Bitcoin has “already won the battle to be the internet’s base monetary layer,” noting that the Mark Zuckerberg ethos of “move fast and break things” is unsuitable when building a decentralized, global monetary network. Bitcoin Core development is rightfully methodical, but this doesn’t mean it’s stagnant.
The Segregated Witness soft-fork and Taproot activation have set the stage for a wave of innovation, such as Lightning Labs’ Taproot Assets Protocol (TAP). If successful, TAP would allow the multi-asset reality to exist natively on the Bitcoin stack, inheriting the Lightning Network’s speed, very low cost and settlement finality.
As the composability on the Bitcoin stack expands, TVP believes entrepreneurs will increasingly choose to build their business on the most secure, decentralized, mature platform possible: Bitcoin.
Quotes: “The purposeful and conservative approach to making changes to Bitcoin Core has given rise to the narrative that ‘nothing is happening on Bitcoin,’ but the data shows that innovation across the Bitcoin stack has begun to accelerate in recent years.” – Crypto Long & Short
“Bitcoin’s careful development has begun to pay dividends.” – Trammell Venture Partners