Bitcoin has a distinct set of properties unlike any other asset, argues the world’s largest cryptocurrency asset manager.
Barry Silbert founder and chief executive of the Digital Currency Group and Grayscale Investments, made an appearance on Bloomberg at the end of a fretful week in crypto, and as expected is un-phased by the Bitstamp-induced correction, predicting this bull run won’t pop like in December 2017.
With bitcoin currently priced at $7,350, there’s every reason to be comforted by the fact that nothing goes up in a straight line, and a correction of sorts was expected by some observers, as EWN reported.
Silbert has seen it all before and is convinced that this bull run will not be derailed. More than that, he says that this time the bull run will be different, by which he means it will not be another bubble rippening for a pop.
How will it be different this time?
So how will it be different? First, he addressed the chart technicals.
“Sentiment, the technicals are great… 80% draw down in price happened what three of four times before. Every time that happens…. record highs. As soon as you get the price going back up animal instincts come back.”
But the really crucially consideration is how the lay of the
land differs, and that comes down to infrastructure.
“The difference between this increase in price versus the bubble in 2017 is the infrastructure is much different. You have custodians now, compliance software, trading software. People are more educated about the asset class. This time it’s different,” says Silbert.
He also addressed the question of trust in the space, interjecting that he thought the ICO phenomenon was at the centre of those worries, and had helped power the bear market.
“All of the demand from ICOs went away. Projects were trying
to stay in business and selling bitcoin.”
Drop gold, buy bitcoin
Grayscale Investments is doubling down on the notion that bitcoin is digital gold, as seen in the recent launch of a nation-wide US TV advertising campaign themed Drop Gold. The ad had been previewed a couple of weeks ago.
Indeed, Silbert partly credits the ad with helping to
generate the buying fever behind the recent bitcoin mega rally.
Although the ad was previewed two weeks ago, the national campaign
only started running t the end of this week.
Silbert makes no bones about the fact that they are targeting a new generation of investors who will soon be coming into the family inheritance and will be more susceptible to the pitch from the issuers of bitcoin financial instruments.
Ad hits the mark with a million views and counting…
It’s a hard-hitting ad. “The ad is designed to be
provocative,” Silbert explains. “This has already gotten over a million views.”
“So what is the number one thing to break in terms of view
points regarding getting gold bugs into bitcoin, he was asked.
The ad is basically aimed at getting into the heads of millennials. “It’s important to start the conversation… there’s a generational shift happening,” he contends. “Anyone who has a phone can access this new asset class”, unlike with unportable gold bullion, as the advert makes clear.
“For the younger generation, money is digital… $68 trillion
in wealth being handed down over the next 25 years.”
“It’s not all going to go into bitcoin, but whatever is in gold is going to diversify into something else.”
But what about the solidity of gold built up over millennia,
how can computer code compare?
“Where gold has history and cultural significance it lacks in
utility. Bitcoin as a financial rail has the potential to be incredibly value
from an intrinsic potential.
In fact, Silbert argues that “gold’s use and utility is going
down”, pointing to its drop in use in electronics, which he says has fallen by
On who is buying gold he says: “It’s central banks buying. So basically, if you are buying gold you are betting on the central bankers, which is weird because gold bugs think that central bankers are idiots and don’t know monetary and fiscal policy.”
He continues: “So, there’s a real disconnect – so OK I’m going to be betting on the bankers doing the right thing yet they’re the ones who are buying gold right now.”
Silbert is not the only one talking about digital gold, with Tyler Winklevoss also weighing in, as the EWN report here shows.
The Digital Currency Group is probably the nearest thing that crypto has to a conglomerate, with its fingers in many pies.
Abra, Bitflyer, BitPesa, Circle, Chainalysis, Coinbase, CoinDesk, Decentraland, Etherscan, eToro, Grayscale, Korbit, Kraken, Ledger, Parity Protocol Labs, Ripple, Shapeshift, Xapo and Zcash, are just some of the companies DCG has a stake in, or owns outright.
So what about some numbers, hard data on the institutional side?
In the first quarter Grayscale Investments saw 70% of inflows coming in from institutional investors and family offices, Silbert reveals.
What was the money buying? According to Silbert “right now it’s just bitcoin”. He said 90% went into bitcoin.
What about the rest of the crypto field?
He was asked what investors are to make of the rest of the field.
Would it be a sea of many or just a few from the 2,000 and more crypto offerings available that would prove their worth.
Silbert said there will be:
“winners in particular use cases, for digital gold bitcoin, privacy will be very big use case, Zcash and Horizon, … we like Ethereum Classic (ETC) for smart contracts.”
Grayscale has been a long-term supporter of the old Ethereum chain that was left behind after the DAO hack forced a hard fork that was followed by majority mining nodes.
Ethereum Classic is not much used, and fell victim to a 51% attack as a result in January, so at this point would be a risky pick for executing smart contracts on.
In July last year Silbert revealed that DCG held five coins, and the choices, bitcoin aside, were surprising,
“So, we have 50% in Bitcoin, 25% in Ethereum Classic, 15% in Zcash, 5% in Decentraland, and our newest one is 5% in ZenCash,” he said at the time
Silbert reiterated that there are “going to be a handful of winners”, so let’s hope he’s changed and rebalanced the holdings in that portfolio of crypto from 10 months ago, for Grayscale investors’ sake.
And what to say about the proliferation and oversupply of
“The ICOs brought in a lot of capital… but there were some negative consequences.”
“More discipline and certainly more infrastructure came out
of it,” he concludes.
He didn’t let the opportunity miss to remind his audience about Grayscale Bitcoin Trust is “the only publicly quoted bitcoin fund out there” The fund has assets under management of $1.5 billion and he thinks it “will be one of the first that gets approved”.
Although it has a year to date return of 132% it trades at a premium of 29%, above its net asset value, ie is priced 29% above the value of its underlying bitcoin holding. That makes it 29% more expensive than buying bitcoin directly.
SEC approved collective investment vehicles still look a long way off in the US. The SEC recently delaying again a decision on the Bitwise Bitcoin ETF, thought to be one of the strongest offerings so far in terms of addressing custody and price discovery issues.
The Grayscale Ethereum Classic Trust has done even better than its bitcoin cousin, with a year to date return of 212%, but trades at a hefty premium to NAV – this time an eye-watering ridiculous 200%.
The post Bitcoin Bull Run: Why This Time it’s Different to 2017 – Silbert appeared first on Ethereum World News.
As Bitcoin steadily approaches $5500, staging a moderate recovery following last week’s crash in pricing, a cryptocurrency investment firm is set to launch its new media campaign.
While Bitcoin has routinely been compared to gold, with the original cryptocurrency likened as ‘digital gold’ throughout its history, Grayscale Capital is taking that moniker to a new level. On May 1, the investment company began a marketing and twitter campaign, using the tag #DropGold, in an effort to broaden the appeal of cryptocurrency to institutional and traditional investors. Grayscale is targeting an investment base that looks to gold for both price stability and long-term store of value.
With a number of Wall Street analysts predicting a market recession for U.S. and global economies in the next several years, gold is likely to make a resurgence, as precious metals have traditionally performed well during periods of stock market uncertainty. However, Grayscale’s new campaign seeks to supplant gold as the predominant asset for storing value, insteads stating its goal is to make, “investment portfolios to reflect that bitcoin has become digital gold for today’s forward-thinking investors.”
Barry Silbert, founder and CEO of Digital Currency Group and its subsidiary cryptocurrency investment firm Grayscale Investments, explained that Bitcoin is far more appealing to the modern generation (millennial) investors and that gold is largely an asset of the past,
“There is a generational shift in how individuals are approaching investing. We strongly believe that investments in gold will be reallocated to bitcoin as Baby Boomers begin transferring their wealth to a younger generation of investors, one that wasn’t raised on the gold standard.”
“The gold industry has done a fantastic job of marketing an overpriced metal but bitcoin has superior physical properties and market utility. I believe that bitcoin will become the store-of-value for our digital age.”
The CEO’s comments reflect the belief of other market analysts that the flow of wealth from Baby Boomers to their, through both inheritance and a general receding of market investment, will provide fortuitous for digital assets and the industry of cryptocurrency. Millennial and younger investors, as a whole, have embraced cryptocurrency to a greater degree than older investors.
Some have pointed out that the risk and volatility of cryptocurrency–thereby increasing the profit and returns to be made–is more appealing to younger and less well-capitaled investors. However, Silbert and Grayscale are banking on the belief that digital assets are more appealing to the modern generation, and are targeting gold as a potential transition for store of value investment. Grayscale’s Bitcoin Trust is reported to have 1.2% of the total bitcoin in circulation, giving the company a substantial stake in the future of the digital asset.
Despite historic volatility for Bitcoin and other top cryptocurrencies, Grayscale reports that the BTC should be considered as apart of a diversified portfolio. Bitcoin has a low correlation to traditional assets, which in turn could lead cryptocurrencies to offer risk-reducing benefits in the event of widespread market turn-down for stocks and bonds.
The post Grayscale Capital Launches ‘Bitcoin is the New Gold’ Campaign appeared first on Ethereum World News.
Grayscale Unveils Horizen-Focused Fund With $6.3 Million Investment
Grayscale Investments, one of the foremost investment-focused firms in the cryptosphere, has just divulged that it will be creating a new fund that will solely be focused on the Horizen (ZEN) crypto asset, a lesser known altcoin that found its legs in late 2017.
— Grayscale (@GrayscaleInvest) September 6, 2018
For those who aren’t in the loop, Horizen is a privacy-centric cryptocurrency project that forked off ZCash’s blockchain in mid-2017. However, this wasn’t a plain old fork, as the team behind Horizen (formerly ZenCash) intended to develop on top of ZCash’s original code to appeal to a broader audience, while also offering anonymous transactions via zero-knowledge proofs (ZK-snarks).
Speaking with Fortune reporters, Rob Vigilone, the co-founder of the cryptocurrency project, revealed the vision for his brainchild. As ZEN’s privacy feature is now well-developed, developers intend to produce apps that leverage ZK-snarks and the Horizen blockchain to offer private messaging, media sharing, voting, and data storage to privacy-conscious individuals, corporations and groups.
Now back to the matter at hand…
Grayscale, who is the firm behind the Bitcoin Investment Trust vehicle, has just purchased $6.3 million worth of ZEN tokens (~400,000 ZEN as per September 5th prices) to establish the aforementioned fund, which will allow accredited investors or financial institutions to essentially purchase shares that ZEN’s every move. Grayscale’s ZEN fund now joins similar vehicles that have a focus on Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Litecoin, XRP, and ZCash.
This move came as a surprise to many, as ZEN is a lesser-known project in this nascent industry, even though it holds a strong position as the 72nd largest cryptocurrency by market capitalization. So while its $83 million valuation is not a figure to scoff at, such an asset would often be off the radar of firms like Grayscale and Coinbase, for example.
However, Michael Sonnenshein, the managing director of Grayscale, spoke with Fortune to explain why his firm decided to make this unexpected move. As per statements from the executive, Grayscale’s top brass believe that Horizen is backed by “superior technology and a strong team” and may prove to be a valuable asset for blockchain-focused companies that intend to utilize the privacy features offered in Horizen’s ecosystem.
ZEN Sees 15% Surge In Otherwise Bearish Market
Once this news broke, ZEN immediately saw a surge in value, as many saw the substantial investment in the project as a bullish sign, to say the least. At the time of writing, ZEN is currently at $18.04 and is up a staggering 14.33% on the day,
As a direct result of the news, ZEN quickly became the leading asset in the top 100 cryptocurrencies, as other crypto assets continued to struggle after Wednesday’s sell-off. It is unclear whether this positive price action will continue, but considering that an influential firm like Grayscale purchased a staggering ~7% of all ZEN tokens (and will likely not sell them) may signal that the price of this asset will continue to run in the mid-term.
Photo by Sean Stratton on Unsplash
The post Horizen (ZEN) Sees 15% Gain As Grayscale Invests $6.3 Million appeared first on Ethereum World News.
Grayscale Investments, the creator of the Bitcoin Investment Trust, is launching four new trusts today, doubling its number of products aimed at helping investors explore cryptocurrencies.
The new trusts – which bring ethereum, litecoin, XRP and bitcoin cash to the offerings the firm provides – join Grayscale’s existing bitcoin, ethereum classic and zcash investment trusts, as well as its Digital Large Cap Fund, a multi-crypto investment fund announced last month.
Each of the newly announced cryptocurrencies is already part of the Digital Large Cap Fund, but were not previously available individually.
Michael Sonnenshein, the managing director of Grayscale Investments, said the new products are part of an expanding suite, and that the firm – a Digital Currency Group subsidiary – will continue to announce new products, both single-currency and diversified.
“It is our belief that digital currencies as an asset class have not only arrived, but are here to stay. Consequently, we are committed to providing investors with structures that enable them to participate in this exciting asset class.”
The new products are among the first securities to allow investment in those particular cryptocurrencies, according to a press release. It adds the disclaimer that, the value of a share in a trust may not correspond to the value of a cryptocurrency being held by the trust.
As of March 5, Grayscale had $2.1 billion in assets under management, Sonnenshein said, up from $208 million just a year ago.
“This is a meaningful milestone for Grayscale as it increases the number of investment offerings under the Grayscale umbrella from four to eight. At this time last year, Grayscale had only one product, Bitcoin Investment Trust,” he told CoinDesk in an email.
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Grayscale, Ripple, and Zcash Company, the for-profit entity that develops the zcash protocol.
Coins image via Shutterstock
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