Despite the headline figure of a $75 million funding round from major financial institutions, Coinbase's investors are using the company to gain insight into how bitcoin works, rather than making a bet on Coinbase, according to the company's CEO.
Coinbase—a bitcoin-related company which just closed Series C funding from investors including the New York Stock Exchange and Spanish bank BBVA—is simply the beneficiary of general interest in the cryptocurrency ecosystem, Coinbase CEO Brian Armstrong told "Squawk on the Street."
In fact, Armstrong said his investors are just "dipping a toe in this water—they want the visibility into this trend to have the best data about where it's going." He added that "these banks are making a smart move by doing this."
Other Coinbase investors include a subsidiary of USAA bank, the investment arm of Japanese telecom NTT DoCoMo and former Citigroup CEO Vikram Pandit. In total Coinbase has raised $106 million, the company said.
Although some small banks have tested cryptocurrencies similar to bitcoin, Coinbase's current round of funding is the first large investment from major banks into the technology, Armstrong said.
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Despite the recent problems for the digital asset—including a sliding price and a costly hacking incident—these investors are doing more than chasing a passing fad, he said.
"They're really excited about it as a technology, and these people are bitcoin believers," Armstrong said. "They're really interested in the potential that it has to make payments fast, cheap and global for everyone around the world."
Some technologists distinguish bitcoin the currency from bitcoin the technology—the digital protocol could be used for a number of financial applications that could potentially involve fiat currencies.
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Armstrong told CNBC that he did not anticipate any of Coinbase's investors acquiring his company in the near future. "We want to stay as an independent company," he said.
Armstrong emphasized that bitcoin's exchange rate (which went from about $1,150 in 2013 to the current level of around $220) was not essential to the success of his company, or its investors. As a provider of bitcoin wallets and facilitator of payments, Coinbase is more reliant on trade volume than daily price, he said.
Still, he admitted, some investors in the space have been burned by bitcoin's 2014 troubles.
"We're really looking at something similar to like the Internet bubble that happened around 2001, so like any new technology people got very excited about it, there was irrational exuberance if you will," he said, adding that a correction has since brought the currency "back to reality."
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Some have alleged that the massive rise in bitcoin's price near the end of 2013 was more the result of a pump-and-dump scheme than a speculative bubble, and a recent dip below $200 led some traders to tell CNBC they had no idea when the cryptocurrency would find a floor.
Still, the number of merchants accepting the digital asset has ballooned in the past year, as companies like Microsoft and Overstock.com set up mechanisms for bitcoin payment. Proponents of the technology have argued for several years that public adoption will bring legitimacy and stability to the currency.