Global cryptocurrency adoption is on the rise. With that, leading venture capital firms and investment giants have increased their stakes in companies working in the crypto ecosystem. The Digital Currency Group (DCG) became the latest crypto conglomerate to hit a valuation of $10 billion.
DCG is the parent company of Grayscale, the world’s largest crypto asset manager with over $50 billion worth of digital assets under management. Apart from Grayscale, DCG owns several big companies in the crypto ecosystem.
DCG raised $700 million in the latest investment round. The funding round was led by SoftBank along with participation from GIC Capital, Ribbit Capital and CapitalG, the private equity arm of Google’s holding company, Alphabet.
“We’re the best proxy for investing in this industry. We were looking for the type of backers that could be, and hopefully will be, with us on this journey for the next couple of decades,” Barry Silbert, the Founder and CEO of Digital Currency Group, told CNBC in a recent interview.
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DCG is planning to take advantage of the broad experience of SoftBank and other leading participants. The latest investment indicates that leading venture capital firms are planning to expand into new businesses.
The overall market cap of digital assets has jumped by more than 200% in 2021. While adoption has increased dramatically, there are still some concerns regarding the valuation of cryptocurrencies. According to Silbert, a large percentage of cryptocurrencies are overvalued.
“Ninety-nine percent of the digital assets that exist today are overvalued, and most don’t really have a reason to exist. But, I’m also a believer in creative destruction, and that’s okay that they aren’t going to be valuable, what’s going to come out of it is some incredibly valuable, impactful protocols. The typical reason companies do go public or rush go public is to address liquidity, or to raise money for acquisitions but we don’t have those pressures,” Silbert told CNBC.