In a recent interview on Fortune's online show "Balancing the Ledger", Barry Silbert, the founder and CEO of incubator and crypto-focused venture capital firm Digital Currency Group (DCG), explained why he is excited about the 2019 crypto bull run that has taken the price of Bitcoin to around $8,000 and the things that make it more special/meaningful than the last major bull run which resulted in Bitcoin's price reaching an all-time high of almost $20,000 in December 2017.
Silbert's comments came while he was being interviewed by the show's two hosts, Jen Wieczner and Robert Hackett. This interview covered several interesting topics.
Digital Currnt Group: The Crypto Conglomerate
Silbert explained that DCG does three things:
- invests in early stage companies (currently, it has investments in 145 starts in the blockchain and crypto space);
- invests in digital (or crypto) assets ("we just go long and try to accelerate the awareness and the utility of the ones we are excited about"); and
- owns three companies—Grayscale Investments, one of the largest crypto-focused asset managers, with around $2 billion in AUM; Genesis, which is involved with OTC trading of crypto, as well as institutional crypto lending; and events/media company Coindesk.
In the past, as Hackett reminded us, Silbert had said that he was trying to turn DCG into the "Berkshire Hathaway of Crypto." Silbert confirmed that this was still his aim, and that at some point in the future, he wanted to take DCG public (i.e. do an IPO).
What's Currently Driving the Bitcoin Price
Silbert explained that although during the past 5-7 years we have seen, four times, the price of Bitcoin crash and then rise again to record highs, the difference between this year's price rally and the bubble that we had in 2017 is "night and day" in several ways:
- the custody providers;
- the trading infrastructure;
- the compliance offerings;
- the awareness; and
- the on/off ramps (Bakkt, Fidelity, Square, Robinhood, etc.).
"It's just a matter of how quickly the retail and the institutional money will come into the space. What we see behind the scenes are people starting to open up their checkbooks."
He went on to say that one of their subsidiaries, Grayscale Investments, recently published its Q1 2019 report, which revealed that the majority of the money that arrived in Q1 was from institutional investors, with 99% of the total inflows going into Bitcoin.
Silbert also mentioned that it was notable that "the price stated its accelerated move up right when the trade discussions [with China] broke down," which could be another data point suggesting that Bitcoin performs as a "non-correlated asset."