Institutional Investment in Crypto Grows as Digital Currency Group Secures New Funding

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In Brief
  • The parent company of Grayscale Investments solicits over $10B in a secondary funding round investment from institutional investors CapitalG and Softbank, amongst others.

  • Barry Silbert, founder and CEO of Digital Currency Group (DCG) is looking for long-term investors.

  • David Lawee, founder and general partner of CapitalG has also invested in Robinhood.

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DCG continues to flex its crypto muscles, as it channels more institutional investment into the crypto space.

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Private firm DCG continues to make waves in the crypto space, procuring handsome investments as it stakes its claim to being one of the largest privately held companies in the digital asset space. It occupies the same ranks as Ripple, Kraken, and Circle, and is well on its way to $1B in revenue, according to Silbert. One of its famous subsidiaries, Grayscale Investments, is the world’s largest digital asset manager.

DCG makes it possible for digital asset speculation, without direct investment in the asset. They hold bitcoin and ether, amongst other digital assets. DCG itself has backed more than 200 blockchain companies. DCG owns prime brokerage and institutional lending firm Genesis and the news website Coindesk.

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Institutional interest in digital assets

There has been significant institutional interest in the crypto space, with the likes of Visa, Mastercard, CitiGroup, Goldman Sachs, and JPMorgan Chase amongst the heavyweights to invest in the crypto space. Fidelity Digital Assets, a company dedicated to providing enterprise-grade digital asset solutions for traditional finance incumbents, estimates that 71% of institutional investors will be looking to buy digital assets in the future.

Fidelity Digital Assets released a 2021 report on institutional interest in digital assets in Asia, Europe, and the U.S. Asia leads the pack with 71% adoption. The president of the company, Tom Jessop, has said that bitcoin initially sparked institutional interest. Galaxy Investment Partners’ CEO Mike Novogratz believes that Know-Your-Customer rules could be a way to get more institutions on board, like that which was done in Thailand, for them to be more comfortable doing business with clients in the crypto space.

Long-term outlook for DCG

Softbank’s global footprint and CapitalG’s Google-led expertise in data and consumer companies make them valuable long-term partners for DCG. Mr. Laawe believes that DCG is a winning investment. Silbert believes that the protocols present more of a long-term impact than the assets themselves. Their investments showcase interest by venture capital funds looking to dip their toes in the crypto pool and get exposure to altcoins.

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