You definitely need to consult with lawyers experienced with VC and crowd funding.

In this climate, it would be pretty easy for you guys to get very favorable VC terms, considering the general funding environment, the recency of other VC events in bitcoin, and their relative valuations. Given the popularity of your service, it probably wouldn't be too difficult to raise the money you needed through bitcoin ipo either. Having options is good, as you can play the options against each other for better valuation and terms. I am not familiar with bitcoin IPOs, so I will comment mostly on going on the VC track or not.

VC funding could boost you to the next level

Strategically, it really depends on what you guys want the money for, how you perceive future risks, and where you see yourself in the future. VC money typically ties you into a fast hiring and fast growth track, and execution towards an exit in 4-5 years as you guys already noted. If you find yourself strained because of growth capital, engineering talent, lack of the right contacts, and you think it is a land grab situation, then VC funding makes total sense. If you need top engineers, VC money could help with legitimacy and source talent. If you need industry advisors, VC funding could help you get in touch with important and busy people. But VC funding comes at a price.

VC funding could kill you

In an emerging environment like bitcoin, the strings attached with VC funding could kill you. An example I saw was the emergence of penny auction websites a couple years ago. There were many sites with a lot of VC funding. Off the top of my head, swoopo ($14 million), bigdeal ($4.5 million). They both failed to navigate the legal compliance, customer satisfaction, credit card processing, and user acquisition aspects of penny auctions, and are now dead. In contrast, there are still several privately funded penny auctions that are very much thriving, including quibids, bidcactus, beezid. I personally think the VC funded startups were not able to deploy the funds effectively, and weren't able to stay scrappy and flexible long enough to get big like the non-VC funded penny auctions.

Another Alternative - Angel Investors

You also leave out a 3rd option: Angel Investors. This group are not bound by the restrictions of a formal investment thesis and time sensitive returns expectations. If you are looking for $700k to $1.5 million, raising an angel round maybe viable.

What Would I Do?

Keep in mind, I am some random guy on the internet, who has cursory knowledge of your business. I view VC funding as rocket fuel, only to be used when the rocket is already pointed and going in the right direction. Given the general uncertainty of bitcoin and early phases of adoption, and given your strong position as a more decentralized bitcoin exchange, I would try to hold off VC funding for X months, and try to use other funding sources while maintaining flexibility and control. Revisit the issue after X months and decide if the lack of it has caused you to miss your goals.