In a phone interview with CNBC, Silbert, who reportedly bought into bitcoin at $10, explained:
“I’m not a believer in the vast majority of digital tokens and believe most will go to zero… As far as I’m concerned bitcoin has won the race to be digital gold.”
Is it time to pull money out of altcoins and go all-in on bitcoin?
Most cryptocurrencies will be ‘eliminated’
Barry Silbert says bitcoin has already become digital gold. | Source: YouTube/DLD Conference
There are now more than 2,000 cryptocurrencies, according to CoinMarketCap, but Silbert believes the vast majority are worthless. The initial coin offering (ICO) boom of 2017 spawned a flurry of new cryptocurrency projects. Most had no workable product or roadmap. Many were plagiarized or outright scams.
“Almost every ICO was just an attempt to raise money but there was no use for the underlying token… The vast majority of what’s out there will be eliminated,” Silbert said.
The emergence of ICOs pushed bitcoin’s market dominance from 80% down to just 33% at its lowest. ICO fever also helped propel the cryptocurrency market to an $800 billion market capitalization.
Bitcoin’s market share dropped from 80% to 33% before recovering in late 2018. | Source: CoinMarketCap
Bitcoin is now slowly re-establishing its dominance, perhaps proving Silbert’s theory right. He even went as far as to declare the ICO fever “dead” in another recent interview.
Bitcoin has won the race to become digital gold
Silbert, who was worth more than $400 million at crypto’s height, says bitcoin’s unique feature is its ability to completely replace gold as a store of value. With its finite supply and lack of correlation to traditional markets, the leading cryptocurrency has long been touted as a digital version of the precious metal.
Got a new paperweight. Pretty much the only thing gold is good for nowadays pic.twitter.com/2uwIfz2MpC
— Barry Silbert (@barrysilbert) February 7, 2019
Speaking to CNBC, Silbert said that gold’s dominance will disappear when young millennial investors replace baby boomers. When wealth is passed to the next generation, he says, they’ll put it bitcoin.
“I’m convinced that whatever money is in gold is not going to stay in gold,” Silbert said. “That gets handed down to millennials – I’m highly confident a lot of that will go into bitcoin.”
This doesn’t mean other cryptocurrencies can’t co-exist with bitcoin. Silbert believes there’s space for cryptocurrencies with other functionalities, such as privacy coins and smart contract platforms.
Holding 1% of the entire bitcoin supply
Barry Silbert has firmly put his money where his mouth is. His investment firm, Grayscale, has reportedly been buying up bitcoin throughout the bear market. According to Diar, the company now holds more than 1% of the entire BTC supply on behalf of shareholders.
Grayscale does, however, offer investment products in various altcoins including Bitcoin Cash, XRP, and Stellar Lumens – so he’s not completely discounting other cryptocurrencies just yet.
2/13/19 UPDATE: Holdings per share and net assets under management for our investment products
Total AUM: $793.7 million$BTC $BCH $ETH $ETC $ZEN $LTC $XLM $XRP $ZEC pic.twitter.com/a5LgpWLGCA
— Grayscale (@GrayscaleInvest) February 13, 2019
Silbert’s broader cryptocurrency company Digital Currency Group invests widely in the bitcoin infrastructure. It holds investments in Coinbase, Circle, Blockchain, and Blockstream, among others.
As for its cryptocurrency holdings, the firm only holds a small number of altcoins, including Ethereum Classic, Filecoin, and privacy coin Zcash.
Silbert says he’s as bullish as he’s ever been” on digital gold and that he sees a lot of interest from institutional investors. Is it time to forget about the altcoin market and go all in bitcoin?