In a panel discussion with CNBC Fast Money on 18th July, Barry Silbert, the Founder, and CEO of the Digital Currency Group discussed the Bitcoin price recovery of above $7000 and the possibility of the beginning of a bull market.
Silbert, on the bullish nature of Bitcoin, implied that a large amount of institutional money was sitting in dry powder, seeking an opportunity to enter the market. Eventually, the ‘bears ran out of energy’.
Recently, several negative remarks have been passed on Bitcoin, by the Chairman of the U.S. Federal Reserve, Jerome Powell, and billionaires such as Ken Griffin and Howard Marks. Silbert stated that the Bitcoin prices standing firm in such circumstances is a strong sign of the bull’s long stay.
Bitcoin and other cryptocurrencies have received a plethora of protest from big authorities such as the U.S. Securities and Exchange Commission [SEC] and the U.S. Federal Reserve System. In this context, Silbert was asked about his ‘upstream swim’ in the cryptocurrency space. To this, he responded by saying that:
“That’s the best part I mean that’s, that’s really where you make money when you’re swimming upstream and like I started buying Bitcoin in 2012 when the price was $10 and I’ve gotten through now to 80 percent corrections and this was like a 65 percent correction. It’s the same old criticisms and I think a lot of it is just that they’re uninformed.”
Silbert also added that anybody who would spend the time to research on this asset class, in terms of its significance and potential, will turn into a believer of cryptocurrencies and want to put money in it.
The discussion moved to traditional hedge funds and their approach and feasibility in entering the cryptocurrency markets. Therefore, a panelist asked for Silbert’s opinion on the insufficiency in the infrastructure of the hedge funds to invest in digital assets and their interest in solving the same. Silbert concluded by explaining that many hedge funds do not want to be the first one or the last ones in entering the new space.
Regarding his company’s investments and whether the focus is more on the cryptocurrencies and tokens or the platforms, the CEO said:
“So we’ve invested in 130 companies. I would say… it’s entire spectrum – blockchain, wallets, exchanges – candidly on the enterprise blockchain very little traction, very little evidence that there’s product market fit. I’m really all about the store of value, value prop and I’m all about the infrastructure that’s required to create the on-ramps and off ramps for Wall Street to get involved in this asset class.”
Silbert continues, saying that 2019 is going to be the year of ease as well as social acceptance for those who want to get into the cryptocurrency space.
Further, he was also asked about the fundamental valuation approach to the digital asset class. Silbert explained that he has only invested in five cryptocurrencies that he believes in. The allocation, according to the Digital Currency Group balance sheet is 50% in Bitcoin, 25% in Ethereum Classic [ETC], 15% in Zcash [ZEC], and 5% each in Decentraland [MANA] and ZenCash [ZEN].
On the regulatory aspect of cryptocurrency investments, Silbert clarified that the firm stays away from ICOs and only concentrates on the store value side of the digital assets.
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