Bitcoin and cryptocurrency startups made waves back in 2017 as investors piled into anything bitcoin, crypto or blockchain related.

Now, after the initial excitement has died down, it seems the explosion in successful bitcoin and cryptocurrency startups that some had anticipated has failed to materializewith just two bitcoin and crypto companies featuring on Y Combinators list of its top 100 companies by valuation.

The bitcoin price boom and subsequent bust meant that bitcoin and cryptocurrency startups quickly fell from grace among investors, with only a few, including Coinbase and SFOX, remaining popular.

Earlier this month, seed funder Y Combinator released a freshly updated list of companies it's invested in byvaluation, with the companies included boasting a cumulative value of $155 billion.

Online payments company Stripe, which was among six companies to abandon Facebook's libra cryptocurrency project this week, topped the list, followed by the hotel-disrupting Airbnb.

San Francisco-based bitcoin and cryptocurrency exchange Coinbase placed fifth on Y Combinator's list, while the only other bitcoin and cryptocurrency startup to feature was SFOX, a crypto prime dealer for institutional investors and professional traders.

On Y Combinators previous top 100 list, released this time last year, Coinbase and SFOX were then the only two bitcoin and cryptocurrency companiessuggesting the flow of successful new bitcoin and crypto companies coming onto the scene might have stalled.

The bitcoin price, which has fallen sharply from its all-time high of almost $20,000 per bitcoin at the peak of its epic 2017 bull run, has rebounded somewhat this year but not sufficiently to rekindle investor appetite for bitcoin and crypto startups, it seems.

"Over the past five years crypto markets have experienced many downturns," said Akbar Thobhani, chief executive of Silicon Valley-based SFOX.

"The market is still at a very early stage of adoption and many of the applications are still pre-product market fit. We will continue to see growth in crypto applications and many of these applications will be built on open platforms like bitcoin and ethereum."

The bitcoin price is up over double from where it began the year, though hasn't recovered enough to restore the confidence of investors.

Last month, Coinbase and Ripple, the payments group behind the XRP cryptocurrency, crashed out of a top 10 U.S. startups list for 2019each dropping over 20 places.

Meanwhile, investors, predominantly hedge funds, are pouring cash into crypto-linked investment trusts despite the bitcoin price downturn.

Grayscale Investments, which runs ten crypto-linked investment trusts, recorded inflows of $255 million last quarter, its best ever three-month period.

"There is an across-the-board sentiment that digital currencies is an asset class that is not going away," Michael Sonnenshein, managing director of Grayscale, told Business Insider.

While investors seem happy to bet on bitcoin, they have less confidence in startups promising to bring bitcoin and crypto innovation.

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Has Bitcoin Innovation Stalled? - Forbes