Barry Sibert Downplays ICO Model, Comments on Wall Street’s Real Crypto Perspective
Barry Sibert Comments on ICO and Wallstreet’s Stance on Bitcoin
Crypto Venture Capitalist and founder of Digital Currency Group Barry Sibert discussed with Forbes his philosophy concerning the disintermediating funding process. Sibert commented that his company is constantly seeking potential blockchain projects. In his view, most projects do not serve a practical purpose and attempt to tokenize projects that do not require tokenization.
As he stated,
“To us investors, buying tokens for utility does not make sense, especially when it’s adding friction to a product that didn’t need a token in the first place.”
Sibert also discussed doubt as to whether teams behind most of the ICO projects had the capability to deliver. In his view, it takes ten years for an idea to succeed or fail and the best strategy is to verify the ICO teams based on their past performances. He also discussed his concerns with the valuation of most ICO projects, staying that the majority of expectations are “unreasonable.”
In his words,
“The idea that somebody can put up a whitepaper, put up a website and go raise money from the masses, it goes against everything I’ve come to see working in the US.”
As for token regulation, Sibert believes that US regulators are interested only in protecting investors. He has visited Washington, DC numerous times to meet with lawmakers and SEC officials, but they are still equating tokens with securities, even without specific laws.
“Ultimately, the whole ICO market is going to go away or it will be going to evolve. Utility tokens, in long-term, will not have any appreciation barring their use in projects related to commodities or natural gas or copper. They are not a good investment.”
Sibert’s comments come at a time where over 90 percent of ICO projects that have launched in the past two years have not delivered on their products. As a result, there has been a decrease in token sale investor interest as a whole. Investment into blockchain ideas, according to Autonomous Research, has also significantly decreased.
Sibert’s seed investment fund invested in companies such as ShapeShift, which was non-compliant with SEC regulations until recently. ShapeShift’s portfolio included projects that have utility token issuance plans, but the projects are minimal – at least according to venture capitalists.
“We have no more than 2-3% ownership in these projects and we are not in their board of directors. . . We assist our portfolio companies [such as Protocol Lab] by recommending/arranging lawyers to issue utility tokens under compliance. We are very excited with the long-term prospects of their utility tokens.”
Sibert has also expressed doubt as to whether tokens with SEC approval would serve any better purpose than existing proof-of-ownership stocks like Facebook’s. He stated,
“I’m not convinced that it does. IT was hard to create a liquid market in Facebook and that was a multi-billion dollar company.”
Sibert also noted that Wallstreet’s treatment of bitcoin publicly is not the same as the stance it takes on digital currency in private. He stated,
“What we’re seeing right now is the level of engagement and the level of seriousness that we see coming out of the Wall Street institutions and banks is an all-time high. There are plenty of commentators that say Bitcoin is dead but behind the scenes, the Bitcoin market is full steam right now.”