FinTech: A New Focus for Bitcoin Companies?

Bitcoin used to be touted as the largest, most promising digital currency, with the power to transform how we think about currency, payments and technology. However, the tide seems to be turning as interest shifts to the blockchain technology behind bitcoin.
Business Insider, The Guardian and CoinDesk have all recently published articles outlining what appears to be an epidemic of bitcoin companies turning away from the cryptocurrency in favor of more general FinTech applications.

Bitreserve goes through major relaunch

The most telling anecdote from these articles is the story of Uphold, a company that originated as a bitcoin wallet and exchange called Bitreserve. Its recent incarnation is a more general online money service that relies upon the blockchain to provide free currency transfers.
The company’s CEO, Anthony Watson, explained its recent relaunch to Buisness Insider as follows: “[w]hen we say bit, we don’t mean bitcoin, we never did. We meant bit as is bits and bytes and reserve is obviously holding the value. But people are confused, they think we’re just a bitcoin company and it makes sense as our first use case was bitcoin.”
Uphold’s dramatic effort to distance itself from bitcoin speaks to a broader trend within the FinTech industry. Circle and BitPay are a couple of other companies that are taking similar steps to expand beyond their bitcoin origins, possibly due to waning faith in bitcoin. Indeed, that is certainly what seems to have happened in Watson’s case. “I don’t think bitcoin is going to be anywhere near as important as people say it is today. That’s a personal view. The blockchain is very transformative,” he said.

Investor takeaway

The movement away from bitcoin should perhaps caution individuals from investing too deeply in bitcoin. Indeed, blockchain technology appears to be emerging as the much stronger area of investment, with its diverse uses and applicability to a broad range of sectors.
However, that isn’t to say that bitcoin is completely dead, or even close. After his remarks were published in Business Insider, Watson took to social media to clear the air about bitcoin. He tweeted: “we’re not moving away from #Bitcoin, @UpholdInc is now the cheapest place to buy #BTC! We have been, are and will be bullish on #BTC.”
All in all, it seems that Uphold isn’t ready to cut ties with bitcoin just yet. Meanwhile, the company’s expansion into other areas suggests that the bitcoin industry as a whole is flourishing. With that in mind, investors should perhaps not panic just yet over the slew of articles suggesting that companies are turning away from the cryptocurrency. 
 
Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.