Barry Silbert is a man on a mission. As the founder of SecondMarket, the ink has barely dried on Nasdaq’s acquisition of the fintech platform specializing in tender offers (private transactions in private companies) and now the entrepreneur is on to his next big thing.
[x_pullquote type=”right”]As it gets more liquid, as a [payment] rail it will become a real alternative to the existing money transfer systems in the world today. — Barry Silbert, Digital Currency Group[/x_pullquote]Silbert took the opportunity of speaking from the stage at Money 20/20 to announce the launch of his new firm, Digital Currency Group (see its Crunchbase entry). DCG, a digital currency and block chain company, is being joined by an A-list of strategic investors. Bain Capital Ventures, Transamerica Ventures, FirstMark Capital, MasterCard, and New York Life will use DCG to gain exposure to the rapidly growing cryptocurrency space.
In addition to these investments, the company will also operate wholly-owned subsidiaries Genesis Global Trading, a bitcoin OTC trading firm, and Greyscale Investments, the firm that manages the publicly traded Bitcoin Trust (Symbol: GBTC). Silbert also said that DCG will launch a third wholly-owned subsidiary in 2016 (Source).
Fortune’s Dan Primack had more color on Silbert’s strategy driving DCG:
It also will house a portfolio of 57 seed-stage investments that Silbert and his team have already made, including Chain, Circle, Coinbase, Ripple and Xapo. They also have backed several companies looking to exploit bitcoin’s blockchain technology for uses outside of finance, including Ascribe (managing digital IP) and ShoCard (digital identification).
Silbert has been very active as an investor in the bitcoin space. He said that given the extent of his portfolio, he estimates that his portfolio has attracted 70% of all venture capital that’s been poured into the digital currency and bitcoing space.
Creating a digital currency ecosystem
Silbert plans to utilize DCG as a holding company of sorts to make further investments in the space. He told CoinDesk that DCG will invest in a further 10 to 20 companies in 2016.
Indeed, Silbert sees DCG’s role as more than just a seeder of new business in the fledgling market. With such a sizeable and influential portfolio, DCG can act as somewhat of an ecosystem for companies playing in the blockchain space.
In turn, his company is hoping to use its “unique position” in the industry to foster collaboration between entrepreneurs, investors and – crucially – legacy institutions, who are seeking answers about blockchain technology’s disruptive potential.
That’s just one side of the market. Large financial institutions, some of them making their first moves into the digital currency space, need the safety and guidance of a firm that’s helping to lead the charge. That’s where DCG comes in. With 5 showcase institutional investors, DCG may act as a curated accelerator of firms looking to do business with the incumbent financial industry. In this way, DCG can act as matchmaker, pairing up supply and demand between startup fintech firms and larger, multinational institutions looking to partner.
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