On Wednesday (18 July 2018), Barry Silbert, the founder and CEO of crypto-focused venture capital firm Digital Currency Group (DCG) said in an interview with CNBC’s “Fast Money” that DCG had invested money in only five cryptocurrencies, and that he thought the others would “go to zero.”
Silbert made this comment after he was asked by host Melissa Lee when he thought that we would see the differentiation in trade between the different cryptocurrencies. This was his full answer:
“I am hoping that the movement of Wall Street into this asset class, which will bring a more fundamental valuation approach to this asset class… There's thousands of them out there. There's only five that we like. There's only five that we have money in. The other 99%, I think, are going to zero.”
Lee then asked Silbert what were these five cryptocurrencies that his firm liked so much. Silbert replied:
“So, we have 50% in Bitcoin, 25% in Ethereum Classic, 15% in Zcash, 5% in Decentraland, and our newest one is 5% in ZenCash.
Silbert then added that since [SEC] Chairman Clayton had made it clear that most of ICOs are securities, he was “pretty skeptical” about ICOs:
“We don't really play in the space. We have companies that are involved, you know, as an exchange or wallet, but in terms of where we are putting our money, we are staying away from the ICOs, and focusing on assets that have a 'store of value' aspect to them.”
Looking at DCG’s favorite five cryptocurrencies, Bitcoin’s presence in that list does not require any explanation. But what about the others?
Well, Coinbase announced on 12 June 2018 that it would adding support for Ethereum Classic (ETC) within the next few months (more likely, several weeks, since Ethereum Classic has a lot in common with Ethereum, which Coinbase already supports).
Zcash (ZEC), a privacy-focused coin, was recently (and perhaps a bit surprisingly) got approval from New York State Department of Financial Services to be listed on the Gemini digital asset exchange, and it started trading there on 22 May 2018. Furthermore, according to Coinbase’s announcement on 13 July 2018, Zcash is one of the five cryptocurrencies that Coinbase is considering adding to its platform.
To understand why there are two privacy coins, Zcash (ZEC), and ZenCash (ZEN), in the portfolio, it helps if you know what Silbert said on 25 April 2018 at StockTwits’ “Stocktoberfest East” event in New York City:
“There is approximately 10 percent of the world's wealth held in offshore bank accounts.. I believe that financial privacy is going to become a really, really important thing not just in emerging markets, but in the U.S. as well.”
At the same event, while speaking about ZenCash, he said that he loved the team: “I love the vision, and the community that we’ve gotten to know is incredibly passionate.”
As for Decentraland (MANA), “a virtual reality platform powered by the Ethereum blockchain,” on 5 January 2018, this is how Silbert expressed his enthusiasm for this project:
Decentraland is one of the projects I'm most excited about this year. Think of it as Second Life + VR + crypto ($28 mm of “virtual” land was just sold)
— Barry Silbert (@barrysilbert) January 5, 2018