CoinDesk is releasing its ‘State of Bitcoin 2014‘ report on Tuesday, which takes an in-depth look into the evolution of bitcoin and the potential hurdles it is still yet to face.

This article is the first of a two-part series drawn from the report. The series looks at the trends in venture capital investment in bitcoin.

It assesses how venture investment in bitcoin to date compares with other related investment sectors (eg financial technology), or previous major waves of investment (eg the Internet).

It also examines the types of Bitcoin companies venture investors have focused their funding on.

Look out for part two, which will be published tomorrow and focuses on which regions have been receiving the lion’s share of venture investment in bitcoin.

Venture investment: early Internet vs early bitcoin

Venture capitalist and Internet pioneer Marc Andreessen recently compared the current understanding of bitcoin’s overall potential, as well as its current stage of development, to the Internet circa 1993 and the PC in 1975.

Does the level of venture capital invested in bitcoin to date reflect Andreessen’s assessment?

Table 1: VC Investments in Bitcoin Companies, 2012-Present

Comparing this bitcoin investment to date with investment in the early Internet, (Table 2) reveals that that significantly less funding (approximately 20%) has been allocated to Bitcoin compared to Internet startups, which pulled in just over $500m in venture investment in 1995.

Table 2: VC Investments in US Internet Companies, 1995

With regards to the above comparison, there are several important caveats. First, due to data availability limitations there is no way to compare the Internet investments circa 1993 with bitcoin 2014, as 1995 is the earliest year in which we have Internet investment data.[1]

The above Internet investment data also reflect only US investments as global data are not available. While the vast majority of early Internet investment was US-based the $507m figure likely understates total global Internet investment in 1995.

On the Bitcoin side, the $97.5m in venture capital that has been publicly reported underestimates the total, which would include unreported venture investment, by tens of millions of dollars.

For example, we know that Andreessen Horowitz has invested just under $50m in bitcoin-related startups, and that Coinbase and Ripple have only received $25m and $9 million, respectively, in rounds which Andreessen Horowitz may have participated. CoinDesk is also aware of, but not privy to disclose, other million-dollar-plus funding rounds in Bitcoin startups, and these figures are, therefore, excluded from this analysis.