Let’s say you believe that the price of gold is going to go through the roof (as opposed to where it has been going lately: the basement). To capitalize on that belief, do you run out and invest in mining or smelting equipment companies? Or do you just buy gold? (You buy gold.)
But that’s just where angel investors and venture capitalists are putting cash—and stirring hype. Companies such as Coinbase, Coinsetter and BitPay, among others, are getting funding, even as the Bitcoin market itself has shown just how risky the trendy cryptocurrency of the moment can be.
“At this early stage of the game, it does seem like investing in Bitcoin (if you think Bitcoin will be the winner in these types of currencies) would be wiser then investing in a Bitcoin company,” says entrepreneur and angel investor Elad Gil. “Especially since if Bitcoin is widely used it will have lots of upside still and it is hard to choose who the winner will be in this early market.”
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