Digital Currency Group (DCG), one of the largest crypto venture funds in the world, is once again drawing attention to privacy-focused cryptocurrencies as the next major trend in the industry. DCG’s portfolio includes Grayscale, CoinDesk, Genesis, and dozens of other companies actively operating across different segments of the crypto market. According to DCG founder and CEO Barry Silbert, in the coming years up to 5-10% of Bitcoin’s market capitalization could flow into privacy-focused coins such as Zcash (ZEC), as well as other promising projects in this sector.
“Bitcoin still remains the core asset of the portfolio, and I am very bullish on it as part of a diversified investment portfolio. But a 500x increase is unlikely without a complete collapse of the U.S. dollar. In the privacy coin sector, there are projects with 100x, 500x, and even 1,000x potential,” Silbert emphasized at the Bitcoin Investor Week conference in New York City.
He added that the narrative of Bitcoin as “anonymous cash” no longer works. Modern analytics firms such as Chainalysis and Elliptic make blockchain transactions traceable, and built-in privacy features in Bitcoin, in Silbert’s view, are unlikely to ever appear despite clear user demand.
Silbert believes that some of the capital already in Bitcoin – or that could flow into it – will eventually find its way into privacy coins. “The bet we are making is that 5-10% of Bitcoin’s market capitalization over the next few years is going to move into privacy-focused cryptocurrencies,” he noted.
Grayscale has already managed the Grayscale Zcash Trust since 2017 and plans to convert it into an ETF. Previously, the fund also offered an investment vehicle for the ZEN token, the native asset of the Horizon network, which now operates as a Base Layer 3.
In addition, privacy coins, according to Silbert, may serve as a hedge against quantum risks that could potentially threaten older publicly exposed Bitcoin addresses. “Zcash is a great hedge,” he stressed.
With Paul Atkins taking over as SEC chairman, Silbert has become more comfortable speaking publicly about financial privacy, emphasizing: “Privacy is my jam right now.”
Overall, DCG’s strategy reflects the view that privacy-focused cryptocurrencies could become a key segment of the industry’s future, offering institutional investors both asset protection and multi-fold growth opportunities that traditional Bitcoin may not provide in the current macroeconomic environment.
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