DCG's Barry Silbert: 5%-10% of Bitcoin 'is going to find its way into privacy-focused crypto,' like Zcash

Digital Currency Group co-founder and CEO Barry Silbert is doubling down on the investment thesis that financial privacy is not just a “fundamental right,” but also the crypto industry’s next big asymmetric bet. 

“I am incredibly bullish about Bitcoin as a core part of a diversified portfolio, but I like to invest in projects that are transformative and have 100, 500, 1,000x type return opportunities,” Silbert, a longtime bitcoin backer, said at the Bitcoin Investor Week conference in New York City on Wednesday.

“Unless the U.S. dollar completely collapses, Bitcoin is not going to go up 500x. I think Zcash can go up 500x. I think a Bittenser can go up 500x,” Silbert added, referencing the zk-powered privacy blockchain and AI-focused network. “And so our portfolio is allocated accordingly.”

The statement is significant given that DCG subsidiary Grayscale launched the first institutional bitcoin investment vehicle in 2013, the Grayscale Bitcoin Trust, which has since converted to become one of the most actively traded spot bitcoin exchange-traded funds.

Silbert remains bullish on bitcoin, but admits the earlier narrative that bitcoin is “anonymous cash” no longer holds in the era of analytics firms like Chainalysis and Elliptic. He is also skeptical that the first blockchain will ever “have any privacy features” despite the clear demand to “use digital money and do so with privacy.”

'Privacy is my jam'

With that in mind, Silbert said that capital in, or that could flow into, bitcoin may find its way toward the privacy coin sector. 

“The bet that we're making, is 5%-10% of Bitcoin over the next few years, is going to find its way into privacy-focused cryptocurrencies,” Silbert said.

Of note, Grayscale offers the Grayscale Zcash Trust, a public fund initiated in 2017 that it is looking to convert into an ETF. It also previously offered a vehicle for the ZEN token, the native asset for the Horizon privacy chain that is now operating as a Base Layer 3. 

And while Silbert does not think that “quantum” poses a threat to bitcoin — referring to the idea that quantum computers can break elliptic curve cryptography, putting older publicly exposed bitcoin addresses at risk — “Zcash is a great hedge.”

While DCG has been a notable Zcash backer for years, Silbert noted that he’s growing more “comfortable talking about financial privacy” with Paul Atkins leading the Securities and Exchange Commission as chairman. 

“Privacy is my jam right now,” he said.