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Domenic Carosa, Future Capital Bitcoin Fund - The Future Capital Bitcoin Fund (FCBF) Launching Australia's First Dedicated Bitcoin Investment Fund

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Domenic Carosa, Co-Founder and Chairman, Future Capital Bitcoin Fund delivered the presentation at the 2014 Cryptocon Summit and Barcamp in Sydney. …

Domenic Carosa, Co-Founder and Chairman, Future Capital Bitcoin Fund delivered the presentation at the 2014 Cryptocon Summit and Barcamp in Sydney.

The 2014 Cryptocon Summit and Barcamp focused opportunities stemming from Bitcoins core innovation – the blockchain - a decentralised ledger system that allows seamless and efficient exchanges of virtual currency between users and opens up a wealth of opportunities not only for financial products and retail, but literally for any business, enabling them to conduct business more cheaply and more efficiently than ever before. .

For more information about the event, please visit: http://bit.ly/cryptoconsydney14

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  • 1. 1 Cryptocon Presentation July 2014 “Bitcoin represents something fundamental and powerful” – Fred Wilson, Union Square Ventures
  • 2. 2
  • 3. 3
  • 4. 4 The World is changing Email and Web – 20 years ago – life without it? Bank fees – we all hate them Why Crypto currencies will change financial services Future Capital Bitcoin fund
  • 5. 5 My Background Running technology business since 1993 Launched Australia’s first digital MP3 music website in 1999 Listed first company onto ASX in 2000 Launched Australia’s largest Bitcoin fund ($30m)
  • 6. 6 What VCs are saying about Bitcoin Fred Wilson Union Square Ventures •  “We believe that bitcoin represents something fundamental and powerful, an open and distributed peer to peer protocol for transferring purchasing power. “ Tim Draper Draper Fisher Jurvetson •  “Bitcoin has the potential to transform the world the way the Internet did … All finance / commerce can be transformed by Bitcoin.” Mark Andressen Andreesen Horowitz •  “Personal computers in 1975, the Internet in 1993, and – I believe – Bitcoin in 2014.” Chris Dixon Andressen Horowitz •  “Bitcoin is the first plausible proposal for an economic protocol for the Internet.” Jim Breyer Accel Partners •  “I’m confident you’ll see major worldwide retailers adopting …Bitcoin.”
  • 7. 7 …and they are putting their money in… High profile Bitcoin investments from past 18 months $160M: Total VC funding reported in more than 30 Bitcoin deals $50M: Amount invested by Andreessen Horowitz into Bitcoin startups $40M: Investment in Xapo - The largest total investment into a Bitcoin company $30M: Investment in Bitpay – A Richard Branson backed Bitcoin company $25M: Funding of Coinbase – A Sillicon Valley backed Bitcoin company $15M: Liberty City Ventures own “Digital Currency Fund” $11M: Winklevoss Capital investment directly into Bitcoin $2M: Peter Thiel (Paypal) personal contribution to a Bitcoin fund 60 Number of investors in “BitAngels”, a Bitcoin angel investment network Bitcoin startups present a high potential investment option
  • 8. 8 …and accelerating $40M Series B July 2014 $30M Series B March 2014 2014 run rate of US$284m, 3x the 2013 total investment of $87.7m Q1 $64.5m 2013 Total $99.5m Note: *Includes first sequence venture deals but excludes late-stage 1995 internet investments ($257.6m). For additional disclosure on methodology see http://www.coindesk.com/following-money-trends-bitcoin-venture-capital-investment/
  • 9. 9 Financial Institutions are watching Type Activity Investment Bank Report Investment Bank Report Investment Bank Report Investment Bank Report Ratings Agency Report Asset Management Investment Consultancy Report “We believe Bitcoin can become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money transfer options.” David Wood Bank of America/Merrill Lynch
  • 10. 10 …and thought leaders are seeing promise “I’m a big fan of Bitcoin … Regulation of money supply needs to be depoliticized” Al Gore Former US Vice President “Bitcoin may hold long-term promise” Ben Bernanke Former US Fed Reserve Chairman “Bitcoin is a technological tour de force” Bill Gates Microsoft Co-founder “We have elected to put our money and faith in a mathematical framework that is free of politics and human error” Tyler Winklevoss Entrepreneur
  • 11. 11 Opportunity Areas Bitcoin Aiming to Disrupt $457bn+ Total Market Cap Payment Processors: e.g. Visa, Amex, Mastercard $381BN Payment Hardware: e.g. NCR, Micros, Verifone $25BN Money Transfer / ATM Outsourcin g: e.g. Western Union, Money Gram $14BN Bank Software: e.g. Fidelity, Fiserv $37BN Total $457BN + Source: CoinDesk, Wedbush Securities – As at 8 April 2014
  • 12. 12 Offering large potential transaction cost savings of $200billion Potential annual net savings with Bitcoin based on 2013 volumes 2013 Market Size ($bn) Retail Ecommerce Remittances $ volume by market 10,383 609 549 Prevailing average pricing 2.5% 2.9% 8.9% Bitcoin pricing 1.0% 1.0% 1.0% Prevailing transaction fees 259.6 17.8 48.9 Bitcoin transaction fees 103.8 6.1 5.5 Potential Savings with Bitcoin ($bn) 155.7 11.8 43.4 Source: Goldman Sachs Global Investment Research
  • 13. 13 Opportunity Areas Bitcoin Companies can be grouped into 6 categories Payment processors Mining hardware Financial services Exchange Wallets Universal Exchange
  • 14. 14 As a “currency”, the price has recovered Source: CoinDesk Bitcoin Price Index daily closing price (taken at 00:00 UTC)
  • 15. 15 … opinions vary on where it could be Sound economic models developed by senior bank officials… “Our current view implies a maximum fair value of bitcoin = US$1,300” David Wood Bank of America/Merrill Lynch …To those that are “true believers” “We believe Bitcoin could reach $US $10,000” Tyler Winklevoss High profile Bitcoin advocate/ Facebook
  • 16. 16 While Bitcoin as money is small 2,705 255 8 7 0 500 1,000 1,500 2,000 2,500 3,000 US Australia Guatemala Bitcoin M1MoneySupply(US$BN) Rank Country Money Supply ($BN) 90 Bitcoin 6.15 91 Afghanistan 5.92 92 Sudan 5.85 93 Macau 5.84 94 Uzbekistan 5.84 95 Serbia 5.79 96 Ghana 5.77 97 Uruguay 5.32 98 Papua New Guinea 5.30 99 Malta 5.27 100 Yemen 5.14 Bitcoin is small compared to US, Australian currencies … but there are 100 countries that have a smaller currency supply than Bitcoin
  • 17. 17 Its use in commerce is growing Region Businesses North America 1,563 Europe 1,478 South Asia / Australia 227 South America 167 India 94 Africa 24 Approx. 60,000 merchants accept Bitcoin ... mostly online Physical businesses accepting Bitcoin
  • 18. 18 Bitcoin advancing on other networks Bitcoin Western Discover Paypal Discover Amex Union Pay Master Card Visa AverageDailyTransactionVolume(US$) (Pulse) $100M $1BN $10BN $20BN $41M $216M $299M $397M $438M $2.4BN $7.5BN $9.8BN $16.5BN Source: Coinometrics.com, 30 April 2014
  • 19. 19 Bitcoin access by merchants and customers is becoming easier Point of Sale By Internet By Mobile Bitcoin ATMs
  • 20. 20
  • 21. 21 Next Steps Participate in the global Bitcoin phenomenon Contact: Domenic Carosa dom@futurecapital.com.au +61 411 19 69 79 Holger Arians holger@futurecapital.com.a u +61 439 716 110 www.futurecapital.com.au/ bitcoinfund