2015 has been a banner year when it comes to Bitcoin venture capital investment. In the first six months, investment easily eclipsed the total number for all of 2014. Now, the numbers for Q3 show that capital investment is way down from just months ago and Bitcoin startups are feeling the pinch.

Who turned off Bitcoin’s financial faucet?

You know what they say: once is an occurrence, twice is a trend. The third quarter of 2015 did see a 15% increase over the same period of 2014 -- a good sign -- but a lot has happened in the interim. The fourth quarter of 2014 and the first quarter of 2015 saw explosive growth in Bitcoin venture capital investment.

The chart below shows the VC investment numbers dropping just as fast as they grew in the previous quarters.

These ebbs and flows are quite unlike the relative stability and lack of volatility Bitcoin has shown in 2015 with its market values. As Bitcoin prepares to pass the US$1 Billion market of total venture capital investment, the slowdown was not totally unexpected by investment experts.

“It is natural that VCs are waiting to see whether their previous investments have panned out before increasing investment,” said Gil Luria, an analyst at Wedbush Securities.

Examples of Bitcoin startups that have struggled recently include BitPay, the largest Bitcoin payment processor, which cut over two dozen staff and contractors last month. BitPay was backed by several venture firms, including Founders Fund. Bitcoin marketplace Buttercoin shut its virtual doors earlier this year, joining many others who have either closed or merged with others to survive.

All Bitcoin news is bad, far from it, according to Tim Draper of Draper Fisher Jurvetson. They have made Bitcoin investment a core part of their market strategy and are very happy with the results so far. His son, Adam, has used his company, Boost VC, to also back many up-and-comers in the space.

“Our Bitcoin companies are rocking, and there are lots of buyers and not many sellers of bitcoin out there. The transformation is here,” reports Draper to Bloomberg Business.

Adam does see an issue cropping up recently, indicative of the mainstream views of the larger economy. Right now, Bitcoin’s Blockchain is hot, and Bitcoin - not so much. So the approach in a period of adjustment for those looking for capital investment may be in how you pitch your company’s market strategy.

"We use the word blockchain now. I say bitcoin, and they think that's the worst thing ever. It just feels like they put up a guard.” Draper told CoinDesk. “Then, I switch to blockchain and they're very attentive and they're very interested.”

Other investors also see no reason to panic and are also increasing investment in Bitcoin-related businesses like Michael Terpin, who has invested more in Bitcoin in 2015 than he did in 2014.

Terpin:

“There’s a lot of pivoting of companies saying we want to build things for companies on the blockchain. The rate of growth is slowing, and that’s not a surprise. For the most part, we are seeing a mild hiccup. Nothing goes up forever. I don’t think we are in a 2001 crash moment in bitcoin. We are in the 1997 inflection point.”

Needless to say, this news of reduced Bitcoin investment may influence other investors to watch from the sidelines in Q4. However, the pattern of two quarters of growth followed by the opposing bear market may yield a strong finish to 2015.  

In January, we’ll know the total story for 2015 and it will be a noticeable increase, year over year, regardless. But more importantly, it’s not how much money is invested, but what you get out of it that really counts.