Who is Behind the Digital Currency Group?
The Digital Currency Group, or DCG, was officially launched by CEO Barry Silbert less than one week after he sold SecondMarket to NASDAQ. Silbert carefully chose investment partners who share his long-term commitment to cryptocurrency and so-called crypto-companies based on this emergent financial solution. Unlike many of its competing financial interests, the DCG is structured as a company rather than a fund, allowing them to continue making investments in Bitcoin startups and other relevant technological innovations.
A Strong Start
The DCG got off to a strong start, having announced almost immediately after its inception that it had raised money from a number of high-profile investors such as MasterCard, Bain Capital Ventures, and New York Life. Silbert already had a successful track record of entrepreneurship within the financial sector prior to founding the DCG, so while many of those currently involved in the group have never invested into digital currency and blockchain space before, there’s no reason to believe that this company will be any less successful than his first.
The DCG’s mission, as stated by its CEO, is to accelerate the development of a financial system based on Bitcoin and blockchain technologies. Silbert’s decision to structure the DCG as a traditional company will give the DCG the flexibility to invest in and buy out other companies working within the financial sector and give it access to permanent capital, helping to support the group’s long-term mission.
As Silbert notes, creating a fund or, more likely, several different funds, would have led to having different stakeholders for each fund, making it more difficult for everyone involved to make decisions regarding business allocations and capital. Silbert intends to eventually take his company public, although he is quick to note that this is not a short-term plan.
The company’s first wholly-owned subsidiaries included Genesis Global Trading, an existing over-the-counter trading firm for Bitcoin, and Grayscale Investments, an asset management firm responsible for managing the Bitcoin Investment Trust. The Bitcoin Investment Trust is an existing publicly traded fund designed to trade like an exchange-traded fund. The company also invested early in other companies across the world, including several in Japan, Argentina, and Kenya.
Silbert reported that his nascent company had plans to make anywhere between 10 and 20 new investments in its first year and held a Bitcoin-focused conference in New York City less than a year after the company’s creation. This conference was designed to bring companies, investors, and the Wall Street community more generally together to talk about Bitcoin, but it certainly didn’t constitute the only foray Silbert’s company made early on into exploring the research, data, consulting, lending, and insurance issues surrounding cryptocurrencies.
Insurance Firm Investment
Investors like New York Life and Transamerica Ventures were drawn to the DCG thanks to the forward-thinking nature of these companies’ lead executives. Investors like these and other global insurance giants understand that Bitcoin technology has the potential to improve their underwriting processes and make it easier to onboard new customers. These insurance firms themselves aren’t the only ones to benefit from Bitcoin investment, though, as many of the early-stage companies within DCG’s network can benefit from working with insurance firms.
The choice to work with diverse investors speaks to Silbert and his company’s commitment to establishing a support network for his group of companies. The company has a dedicated director of community whose job is to connect investors and companies with each other for conferences and mutual aid.
Silbert set out to build the largest early-stage investment portfolio possible for digital currencies and blockchain ecosystems, and it’s clear by now that his company will live up to these grand plans. The DCG has continued to grow in recent years and expand its investments and services overseas, allowing it to create a global exchange alliance.
Ultimately, Silbert’s goal is to foster a digital currency ecosystem that takes advantage of global standardization and cross-collaboration between industries and investors to make trading in Bitcoin easier and more secure. With so many great minds working on this project, the DCG is a company to watch. It’s clear that this company constitutes a driving force behind changes in the global financial climate pertaining to Bitcoin but also to cryptocurrencies and blockchain technologies more generally.