Barry Silbert’s Digital Currency Group is now a $10B crypto empire

Digital Currency Group is rivalled by only a short list of companies across the ecosystem, solidifying Barry Silbert's crypto kingpin status.

SoftBank recently invested in Barry Silbert’s Digital Currency Group (DCG) at a $10 billion valuation — placing DCG among the most valuable crypto enterprises in the world.

Silbert’s DCG generates over $1 billion in annual revenue and is an early backer of fund manager Grayscale, media brand CoinDesk, exchanges Kraken and Genesis, stablecoin issuer Paxos, and hundreds of other well-known crypto companies.

DCG raised $700 million in this funding round. Participants included SoftBank, Ribbit Capital, Singapore’s sovereign wealth fund GIC, and Alphabet’s venture capital subsidiary CapitalG.

DCG had collected a total of $25 million in previous funding rounds since launching, making this a comparatively large raise. Its previous valuations remain undisclosed.

Indeed, DCG is now valued lower than only a small list of companies across the crypto sphere — mostly exchanges like Binance, FTX, Huobi, Coinbase, and Kraken.

Silbert said the goal of his latest funding round was not to raise new capital for the company, but rather “an opportunity for some early investors to get out and take profits.”

He did not sell any of his 40% stake in the company and DCG did not receive any proceeds from the offering.

Grayscale is Barry Silbert’s crown jewel

Silbert’s career includes investment banking. Prior to DCG, his notable prior venture was Second Market, the private market trading platform.

He sold Second Market to NASDAQ in 2015 and immediately founded DCG with his fresh fortune.

DCG has invested in 200 crypto companies across dozens of countries, including BitGo, Bitso, BitPay, Blockchain, Blockstream, Chainalysis, Coinlist, Etherscan, eToro, Fireblocks, Foundry, FTX, Ledger, Lolli, Luno, Paradigm, ShapeShift, Silvergate, and Xapo.

Grayscale is DCG’s largest portfolio company, handling over $56 billion in digital assets — making it the market’s biggest crypto fund manager.

Grayscale operates the world’s top Bitcoin trust, GBTC. Because of its unresponsive structure, GBTC now trades at a discount to its net asset value.

Barry Silbert’s Grayscale is msotly Bitcoin.

This does little to inspire buyers to purchase it over Bitcoin or other Exchange-Traded Products and Funds now on offer.

So, Grayscale recently applied for SEC permission to convert GBTC into an ETF.

SoftBank lost billions on bad investments

Tokyo-based conglomerate and holding company SoftBank Group focuses on investment management. SoftBank invests in growth-stage tech companies, including TikTok owner ByteDance.

SoftBank’s Vision Fund manages over $100 billion in technology-focused venture capital. That fund notably invested $18.5 billion in WeWork.

Masayoshi Son is SoftBank’s founder and largest shareholder. He’s the second-richest citizen of Japan.

  • Vision Fund ended up losing $18 billion on its investments in the first half of 2020, about 24% of the $75 billion it had sunk into 88 companies at the time.
  • Chief exec Son admitted to a “foolish” decision regarding WeWork, saying he ignored red flags related to WeWork executives Adam and Rebekah Neumann.
  • In March, SoftBank and WeWork settled a lawsuit related to a deal SoftBank reneged on in 2020.

Spin-off company SoftBank Mobile has more than 46 million subscribers for its wireless carrier service, making it the third-largest wireless carrier in Japan.

Digital Currency Group’s future

Silbert’s plans for DCG include hiring advisors for a wealth management business aimed at individuals who became millionaires by investing in bitcoin.

Silbert also said DCG may invest as much as $1 billion to increase its stake in Grayscale.

Read more: [Grayscale owner tries to lure ETF buyers by pumping its own Bitcoin stock]

And if Grayscale succeeds in converting its flagship Bitcoin fund GBTC into an ETF — it will likely dominate the spot Bitcoin ETF market on arrival.

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