Venture Capitalists and Bitcoin Companies React to Apple’s Blockchain Ban
Emily Spaven (@emilyspaven) | Published on February 6, 2014 at 18:43 GMT
News that Apple had pulled the Blockchain.info app from its App Store broke in the early hours of this morning (UK-time) and the short-term effect seemed to be a dip in the price of bitcoin.
At midnight (GMT), the price was $822. Some 15 minutes later, Blockchain tweeted its response to Apple’s decision and, over the course of the next hour, the bitcoin price fell to $793. By 08:30, the price had fallen to $783.04, the lowest it has been since 2nd January.
At the time of writing, the price is back up to $802, but this is still 8% lower than yesterday’s high of $874.
Jeremy Allaire, CEO of Circle, the bitcoin company that raised $9m in funding last year, said he’s not convinced the price drop was caused by Apple’s actions. He said:
“The volume of bitcoin that is traded each day is so small that just one person, maybe a large miner who is selling BTC to get liquidity, can move the price. So price fluctuations are often absolutely nothing to do with what’s going on in the news.”
Nic Cary, CEO of Blockchain agreed, adding that any time significant news breaks about bitcoin, the price moves one way or the other. However, he doesn’t consider the latest price drop to be an issue.
“Bitcoin is extremely resilient. I’m confident the price will rebound quickly. Bitcoin is impervious to Apple’s app store policies,” he said.
The effect on VC activity
Cary also doesn’t think Apple’s decision will have any wider-reaching implications. He certainly doesn’t think the move will put a dampener on VC activity in the bitcoin space.
“The largest migration of human and financial capital is underway into bitcoin projects and we're just getting started.”
“VCs understand that Apple’s harsh anti-Bitcoin policy is nothing new. Coinbase raised $25 million after their app was yanked last year,” he said. “The largest migration of human and financial capital is underway into bitcoin projects and we’re just getting started.”
Jeremy Allaire also doesn’t think Venture Capital firms will be put off investing in bitcoin companies because of Apple’s harsh stance on digital currency apps.
“Quality VC firms are not news-driven in their decisions. Those that are excited about bitcoin are taking a long view and are interested in how the space is going to evolve,” he said.
Allaire believes companies can build “outstanding” applications that can be used on iOS in a browser and that these can accomplish 99% of what can be done in a native app.
VC activity in the bitcoin space certainly doesn’t appear to be slowing down. Blockchain, BitPay and Bitstamp are all rumoured to be in the process of raising mammoth funding rounds.
It’s evident that Apple’s actions have lost it a fair few fans over the past 24 hours. Twitter, Reddit and other forums are awash with negative comments aimed at the tech giant.