Virgin Group founder Richard Branson is making his first foray into the fast-rising bitcoin after he invested, along with other key figures such as Yahoo co-founder Jerry Yang, about $30 million into Bitpay, a bitcoin payments processor.
The investment, which is the largest so far into a bitcoin-related company, potentially values Bitpay at around $160 million, reported Wall Street Journal. The move also affirms investor faith in a digital currency whose short existence has been plagued by claims of fraud and regulatory crackdowns.
Bitcoin, which was created in 2009, exists in virtual format. It is created through a process known as mining, which involves using supercomputers. The currency has gained widespread acceptance by various businesses such as online retailer Overstock.com and WordPress blogging platform.
Branson explained his decision was motivated by his perception that “banking as we know it is in the midst of enormous change and innovation.” He also added one of his ventures, Virgin Galactic, is already accepting use of bitcoins to pay for tickers. He also added that “Bitpay is a service that continues to build trust, legitimacy and momentum in this exciting currency revolution.”
Bitcoin has had torrid year, one that was marked by collapse of Mt. Gox, which until its February collapse was the world’s leading bitcoin exchange, in a hacking attack. The People’s Bank of China has mounted a series of crackdowns aimed at frustrating the growth of the currency in mainland China, with the latest one (in April) being a directive ordering all local banks and payment processors to avoid dealing with the currency.
Bitcoin prices have plummeted from $1147 last December to the current levels of around $438 due to the heat. Much of the decline has been due to decreased activity from Chinese customers, who comprised the large population of early bitcoin users.
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