Jeff Garzik has spent the past several months pitching investors on a pretty out-there startup idea. He proposed building computer servers attached to satellites, loading them with data about everyday bitcoin transactions, and then launching those satellites into space. As one of the core developers of the virtual currency, Garzik was able to attract the attention of venture capitalists, who have been eager to throw cash at all sorts of bitcoin startups this year. However, the fundraising efforts failed.
On Oct. 13, Garzik sent an e-mail to customers and partners, saying he’d decided to place his startup, Dunvegan Space Systems, in a “deep freeze.” The company was “nowhere close to the necessary fundraising target,” so it halted all “space-related marketing and operations,” Garzik wrote. “Let’s look forward to the time when DSS is un-frozen, and we’re getting back to lofting satellites and drones into space.”
A chill in bitcoin-related investments is not just affecting bizarre satellite-launching ventures. After an aggressive start to 2015 that entailed venture capitalists kicking $373 million into bitcoin startups in the first half of the year, growth slowed substantially in the third quarter, according to data from researcher CoinDesk. The $85 million in investments last quarter represents a relatively modest growth rate of 15 percent from a year earlier and a 41 percent drop from the