“Buttercoin will be turning off our service on April 10th at 11PM Pacific,” the company said in a note on its website. “Be sure to move your bitcoins to another service and remove your dollar balances by Friday April 10th at 11PM.”
Any unclaimed funds will be returned to the accounts that they came from, the company added.
Unlike other bitcoin shutdowns, which are often triggered by hacks and result in customers losing money, Buttercoin is solvent and will provide users with their balance in full. The startup said it is winding down because it wasn’t able to raise new funding — that’s something it attributes to a “dip in bitcoin interest among Silicon Valley investors.”
Buttercoin launched in 2013 with the aim of tackling the global remittance space, aka money that migrant workers send to their relatives back home. It’s a huge opportunity — The World Bank estimates that some $515 billion will be sent in developing countries this year — and Buttercoin’s take was ambitious, it wanted to open local exchanges in a range of countries to facilitate cheaper cross-border currency transfer.
Buttercoin raised a total of $1.6 million from investors, including Google Ventures’ Kevin Rose and Chris Hutchins, Reddit founder Alexis Ohanian, Floodgate, Initialized Capital, Rothenberg Ventures and Switzerland’s Centralway, via its first early-stage investment fund.
Yet, despite those influential backers, it looks like investors are less keen to be involved in bitcoin. Beyond the valuation of the cryptocurrency, which has found some stability this year — as the chart from Coindesk below shows — the bitcoin exchange market has found relative maturity. The rise of Coinbase, Bitpay and a handful of others — which have sucked up millions from investors and won big clients — makes the chances of a smaller player breaking through less likely. Even when that player is backed by reputed people and institutions.
Might this be the first of many casualties from the consolidation of bitcoin? We shall find out.
The value of bitcoin versus the US dollar over the past year