DCG CEO Barry Silbert Believes Most Altcoins ‘Will Go to Zero’

Siamak Masnavi

On Wednesday (February 13th), Barry Silbert, the founder and CEO of incubator and crypto-focused venture capital firm Digital Currency Group (DCG) said in a phone interview with CNBC that he believed that most "digital tokens" would "go to zero".

Former investment banker Silbert is one of the earliest and most active investors in the crypto space. DCG, the company he founded in 2015, says that it is "building and supporting the largest early stage investment portfolio in the digital currency and blockchain ecosystem," backing 110 crypto-related businesses in 30 countries. Its portfolio includes some of the biggest names in the crypto space, including Abra, BitPay, BitPesa, Blockchain, Blockstream, Brave, Chainalysis, Circle, Coinbase, Kraken, Ledger, Ripple, and Xapo. 

Silbert's latest comments regarding cryptoassets came during a phone interview with CNBC:

"I'm not a believer in the vast majority of digital tokens and believe most will go to zero... Almost every ICO was just an attempt to raise money but there was no use for the underlying token. The vast majority of what's out there will be eliminated."

Although Bitcoin (BTC) has fallen over 81% since reaching its all-time high in December 2017, Silbert, who started investing in Bitcoin in 2012, says he remains "as bullish as he has ever been" on Bitcoin, feeling confident that it has "won the race to be digital gold." He believes that millennials do not share their parents' faith in gold, and a lot of the gold they inherit will get converted to Bitcoin as a hedge:

"I'm convinced that whatever money is in gold is not going to stay in gold. That gets handed down to millennials -- I'm highly confident a lot of that will go into bitcoin."

He also thinks now that the infrastructure needed by institutional investors is being built, it is likely that more of them will consider investing in Bitcoin, and that if/when they do, the Bitcoin price will "snap back hard."

On 18 July 2018, the DCG CEO said in an interview with CNBC's "Fast Money" that DCG had invested money in only five cryptocurrencies, and that he thought 99% of cryptocurrencies would eventually go to zero:

"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."

So, what were these five cryptocurrencies that DCG likes so much?

"So, we have 50% in Bitcoin, 25% in Ethereum Classic, 15% in Zcash, 5% in Decentraland, and our newest one is 5% in ZenCash.

 

Featured Image Credit: Photo via Pexels.com

Chinese Yuan 'Inversely Correlated' with Bitcoin, Amidst US-China Trade Wars

Since January 2018, China and the US have been involved in an intense trade war in which both countries have significantly increased tariffs on imported goods and services.

Due partly to the rising tension between the two countries, the Chinese yuan (CNY) has been losing value against the USD. During the same time period, the price of bitcoin (BTC) and other major cryptoassets has been surging.

As noted by the South China Morning Post (SCMP), the value of BTC, the world’s most dominant cryptocurrency, increased by 26.5% to $7,878 during the time period from May 5 to May 17. Notably, US President Donald Trump had announced on May 5 that he would further increase tariffs on goods imported from mainland China.

Chinese Yuan Weakens as Nation’s Government Responds to Increased Tariffs

The SCMP pointed out that the yuan dropped to its lowest level since the past six months after the Chinese government responded to Trump administration’s decision to impose higher tariffs on China.

Commenting on the price fluctuations of both the yuan and bitcoin, Garrick Hileman, a Macroeconomics Researcher at London School of Economics (LSE) and Head of Research at Blockchain.com, remarked:

We are observing a strong inverse correlation between the [Renminbi] RMB’s value and bitcoin, meaning that recent RMB declines over trade tensions have been closely matched by increases in the value of bitcoin.

“Correlation Does Not Necessarily Equal Causation”

Hileman also mentioned that we “cannot be 100% certain” that the bitcoin price has been increasing due to heightened concerns regarding trade tensions and the corresponding decline in the value of the yuan. The blockchain researcher stated:

Trade tensions and declines in the RMB’s exchange rate as correlation does not necessarily equal causation.

Hileman, who earned his Phd from LSE, revealed:

This is not the first time we’ve seen significant increases in the value of bitcoin taking place alongside yuan concerns.

He added that there’s “growing recognition of bitcoin as ‘digital gold’ and it being used as a hedge against various macroeconomic risks.”

“This Year, the Narrative Is Bitcoin, Bitcoin, Bitcoin”

According to the SCMP, bitcoin’s price may have surged recently due to the generally positive remarks made about it at the Consensus 2019 conference.

Meltem Demirors, the Chief Strategy Officer at CoinShares, a crypto treasury management firm, has also confirmed recently that the narrative this year has been mostly about Bitcoin. Demirors revealed that both institutions and retail investors are “feeling good” and are “more confident” about the long-term potential of Bitcoin and the evolving ecosystem that supports it.