After a two-year slump, Bitcoin startups are recovering

     Unlike depositing money into Yu'ebao, some people prefer high-risk investments. In addition to stocks, many geeks are keen on investing in virtual currency Bitcoin. But from December 2013 to today, the price of Bitcoin has plunged nearly 70%.

It’s not just a group of speculators who left, but also venture capital institutions. According to statistics from CoinDesk and CrunchBase, Bitcoin startups raised 45% less money in the third quarter of 2015 compared to the previous quarter. But compared to last year, they actually raised more money.

What do these Bitcoin startups that received funding this year do? Most of them provide financial services and develop underlying architecture. The so-called underlying architecture actually refers to the Bitcoin system, a decentralized network operated by users.

All users come together to record every transaction in real time, and no one or company can control the overall situation. All transaction records are on a public ledger called "blockchain". It is visible to anyone, and so far, it has not been tampered with.

Bitcoin startup Chain is one such company. In its Series B round of financing in September this year, Nasdaq, a stock exchange, also participated in it, hoping to use blockchain technology to build a new stock trading system, get rid of paper certificates, and thus speed up the processing of transactions.

In addition, other industries are also full of imagination about this technology, such as music. Currently, several startups such as PeerTracks and Ujo are working hard to use digital ledgers similar to data blocks to record music downloads and then distribute royalties directly to artists.

It is precisely based on the expectations for blockchain technology that angel investor Michael Terpin has invested in more Bitcoin startups than in previous years.

Traditional financial services companies are also looking to these startups for help. Last week, American Express (AmEX) invested in a technology company for the first time. Bitcoin startup Abra raised $12 million in its Series A round. Abra has made a mobile app that is said to enable real-time global transactions. The company, which provides credit cards, debit cards and traveler's checks to users, just wants to save money and time in cross-border business.

Coinbase, a Bitcoin trading platform that received its third round of financing in January this year, was backed by the New York Stock Exchange. At the same time, it became the first legal trading platform two years after the United States declared virtual currency legal.

In addition, last week the European Union also announced that it recognizes Bitcoin as a legal currency. According to European law, since Bitcoin is not a commodity, its transactions do not need to pay additional taxes.

Whether it is the government or financial institutions, they have paid more and more attention to Bitcoin since this year. Compared with 2014, when investors and venture capital lost a lot of money, the Bitcoin market is recovering.