US-based bitcoin exchange Buttercoin says it is shutting down due to insufficient investor interest to keep it operational. The shutdown will take effect April 10 at 11 pm PST.
In a dedicated ‘Goodbye’ page on its website, the Buttercoin team says that its operation was a success:
“It’s been a wonderful ride and we’re delighted to have created a service so many people enjoy. With the dip in bitcoin interest among Silicon Valley investors, we weren’t able to generate enough venture capital interest to continue funding Buttercoin.”
The assertion of waning investor interest in Bitcoin seems surprising considering the recent outpouring of venture capital into the space. This year’s first quarter set a record for amount of venture investment into the crypto industry, albeit the amount was dominated by two deals, Coinbase and 21 Inc.
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However, the proportion of investor interest in the exchange sector has been lower, with very few receiving funding. What makes Buttercoin’s shutdown somewhat unexpected is that it was one of the few to have secured sizeable investment, $1.6 million, from the likes of Google Ventures, among other angel investors. Significantly, it also received investment of an undisclosed sum from highly regarded Wedbush Securities back in November.
In addition to initially targeting the remittance markets, the exchange was also reportedly working on having exchange conducted in a decentralized fashion, a major value-add for an industry weary of hackings. It even demoed its service shortly thereafter, making the sudden announcement more surprising.
Most other exchanges to have announced their cessation of operations were either victims of debilitating hacking/theft or experienced difficulties maintaining banking relationships. Neither of these were the case with Buttercoin. The exchange said:
“We started Buttercoin with the goal of creating secure and scalable bitcoin infrastructure the community could rely on. We commited to building a service with excellent Security, Technology, Liquidity and Compliance. We’re proud to have delivered on our goal and commitments.”
Users are requested to withdraw their remaining balances prior to shutdown, after which they will be converted to USD and sent to the account from where they were received.