It had been incubated by Silicon Valley A-list facility YCombinator and backed by Google Ventures, but ultimately none were able to save it. The bitcoin exchange service Buttercoin is shutting down this week, after failing to attract more capital.
The news broke this weekend on the company's website, which is informing all users they need to move their bitcoins elsewhere because the service will be shut down on Friday, April 10th, at 11pm PDT. They will also need to remove their dollar balances before deadline - or else, the company says, the money will be returned to the original accounts it came from. Sell price for the currency is now around $255-$259.
So what happened to Buttercoin, a once very promising service in the crypto-currency craze? "With the dip in bitcoin interest among Silicon Valley investors, we weren't able to generate enough venture capital interest to continue funding Buttercoin," they explain. Although there is no damage to the funds trusted by its customers, the company has no means to go forward. They say this was a "wonderful ride" and they're very pleased to have created such a popular service.
Started in 2013, Buttercoin had a handful of backers, having received at least $1.3 million last year from Google Ventures, Centralway Ventures, YCombinator and Alexis Ohanian, Reddit's co-founder. Its team had currently 9 people. According to Coindesk, some of its clients included MegaBigPower and BitPay, as Buttercoin offered quick settlements and high liquidity for bitcoin-based businesses.
"We started Buttercoin with the goal of creating secure and scalable bitcoin infrastructure the community could rely on," the company states in the farewell letter. Whoever wants to reach out to them can do so using the email address firstname.lastname@example.org. "Our staff has always been humble, but are among the most talented in their fields and we're excited to see them go on and be leaders in their industries."
The bitcoin has become the most widely used and accepted crypto-currency around, although there is a limited number of bitcoins available for mining, as per design of its creator. But after hitting high rates in late 2013, the alternative currency has been fading in popularity. In October last year, Norwegian service Justcoin closed after two of the country's major banks cancelled agreements with all digital currencies companies. In February this year, UK's Netagio announced it was shutting down too. In a moment when we're starting to see "bitcoin ATMs" around, will the crypto-currency survive?