Larry Summers joins bitcoin firm as a senior advisor
Summers will be a senior advisor to the Digital Currency Group
Digital Currency Group is busy these days. In the last four months alone, the company acquired the biggest bitcoin news site, CoinDesk, and along with it, the biggest bitcoin conference, Consensus; it also gave money to Coin Center, the bitcoin industry's nonprofit advocacy group.
On Thursday, DCG announced a laundry list of new investors and additions to its team, and among them is one very big name: Larry Summers.
Summers, former Treasury secretary and former president of Harvard University, is joining DCG as a senior advisor. It is a reminder that Summers believes in the future of bitcoin, the crypto-currency that many fare still skeptical about. One year ago, speaking at the Museum of American Finance, Summers was asked about bitcoin and said, "We have seen so little innovation cumulatively directed at taking the frictional costs out of the system. The notion that there’s going to be a lot of innovation and experimentation around how those frictional costs can be taken out feels like a very important kind of idea.”
Digital Currency Group is an investment firm that has poured money into 72 different companies, more than two-thirds of which operate in the bitcoin space. A small portion of DCG's portfolio are companies exploring blockchain technology without bitcoin, so DCG calls itself a digital currency firm, not solely a bitcoin firm. (What is the blockchain? Watch our helpful primer video.) But it is associated primarily with bitcoin. DCG's portfolio boasts almost all of the hottest bitcoin startups, and those startups have accounted for more than 70% of all the venture capital put into bitcoin companies in total.
The CEO of DCG is Barry Silbert, who in 2004 created SecondMarket, which allowed for the trading of private-company stock, and in 2015 sold it to Nasdaq (NDAQ). In DCG's release about its news, Summers says, "Barry and his team at DCG are building an important platform with great potential to help these technologies reach mass adoption.”
In the past, I have called DCG the Anheuser-Busch InBev (BUD) of the bitcoin world, but you could just as easily compare it to Barry Diller's acquisitive InterActiveCorp (IAC), and indeed, Silbert says that DCG models itself after IAC and Berkshire Hathaway. (CoinDesk was DCG's first full acquisition, but expect more to come.) The addition of Summers, along with its new investors, supports the comparisons.
In addition to bringing on Summers and respected bitcoin developer Gavin Andresen as advisors, DCG has raised a new funding round (it will not disclose the amount) from Western Union (WU), Prudential (PRU) through its investment subsidiary Gibraltar, FoxConn through its investment subsidiary HCM International, and others.
But it is the involvement of Summers that may turn some heads on Wall Street. Silbert knows the value of the name. "I've gotten to know Dr. Summers over the past few years," Silbert tells Yahoo Finance, "and it has been fantastic to see his thinking about digital currency and blockchain evolve and mature."
What Silbert and DCG and the rest of the bitcoin industry are hoping is that the general attitude toward bitcoin will continue to mature.
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Daniel Roberts is a writer at Yahoo Finance, covering sports business and technology.
Read more:
How big banks are paying lip service to the blockchain
Here’s how you can invest in the blockchain
Bitcoin's biggest investor just bought its biggest news site
