Monthly Archives: January 2015

The price of bitcoin has suffered recently, with a dip to $200 from $300 since the turn of the year. It was also given the rather dubious title of the "worst investment of 2014" by some news organizations with prices starting 2014 at over $800.

Wences Casares, the founder and CEO of California-based bitcoin services firm Xapo, believes that like the rise of the Internet, it was only a matter of time before the cryptocurrency got it's foot in the door at Davos.

"It's gold 2.0...it's substantially better than gold," He told CNBC on the outskirts of this year's event. His company is banked in Switzerland and provides storage services for bitcoin users. It's not the first time he's been to the event, but the first as a representative of a bitcoin-related company.

Rather than trying to gain more investment, Casares is in Davos to spread the word of bitcoin or "evangelize," as he put it. Casares believes that in 10 years' time, traditional banks will look more like multi-function telecoms firms and believes that bitcoin will form part of that transformation.

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Bitcoin finds a place among the world's elite

Other Coinbase investors include a subsidiary of USAA bank, the investment arm of Japanese telecom NTT DoCoMo and former Citigroup CEO Vikram Pandit. In total Coinbase has raised $106 million, the company said.

Although some small banks have tested cryptocurrencies similar to bitcoin, Coinbase's current round of funding is the first large investment from major banks into the technology, Armstrong said.

Read More Bitcoin keeps falling, and worries keep rising

Despite the recent problems for the digital assetincluding a sliding price and a costly hacking incidentthese investors are doing more than chasing a passing fad, he said.

"They're really excited about it as a technology, and these people are bitcoin believers," Armstrong said. "They're really interested in the potential that it has to make payments fast, cheap and global for everyone around the world."

Some technologists distinguish bitcoin the currency from bitcoin the technologythe digital protocol could be used for a number of financial applications that could potentially involve fiat currencies.

Read More Forget currency, bitcoin's tech is the revolution

Armstrong told CNBC that he did not anticipate any of Coinbase's investors acquiring his company in the near future. "We want to stay as an independent company," he said.

Armstrong emphasized that bitcoin's exchange rate (which went from about $1,150 in 2013 to the current level of around $220) was not essential to the success of his company, or its investors. As a provider of bitcoin wallets and facilitator of payments, Coinbase is more reliant on trade volume than daily price, he said.

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Banks bet on bitcoin. Or are they?

Other Coinbase investors include a subsidiary of USAA bank, the investment arm of Japanese telecom NTT DoCoMo and former Citigroup CEO Vikram Pandit. In total Coinbase has raised $106 million, the company said.

Although some small banks have tested cryptocurrencies similar to bitcoin, Coinbase's current round of funding is the first large investment from major banks into the technology, Armstrong said.

Read More Bitcoin keeps falling, and worries keep rising

Despite the recent problems for the digital assetincluding a sliding price and a costly hacking incidentthese investors are doing more than chasing a passing fad, he said.

"They're really excited about it as a technology, and these people are bitcoin believers," Armstrong said. "They're really interested in the potential that it has to make payments fast, cheap and global for everyone around the world."

Some technologists distinguish bitcoin the currency from bitcoin the technologythe digital protocol could be used for a number of financial applications that could potentially involve fiat currencies.

Read More Forget currency, bitcoin's tech is the revolution

Armstrong told CNBC that he did not anticipate any of Coinbase's investors acquiring his company in the near future. "We want to stay as an independent company," he said.

Armstrong emphasized that bitcoin's exchange rate (which went from about $1,150 in 2013 to the current level of around $220) was not essential to the success of his company, or its investors. As a provider of bitcoin wallets and facilitator of payments, Coinbase is more reliant on trade volume than daily price, he said.

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Finance firms placing bet on bitcoin, or are they?