If the Barclays Emerging Payments Forum wasn't on the radar of bitcoin enthusiasts coming into the week of 24th March, all this changed when SecondMarket and Bitcoin Investment Trust CEO Barry Silbert sent out a tweet that quickly reverberated throughout the community on social media.
indicated on Sunday, 23rd March that 38 institutional investors representing more than $250bn in investment capital were to meet with him at the event. The topic? Bitcoin and the future of digital currencies.
Requests from 38 institutional investors representing +$250 billion to meet with me re bitcoin at Barclays Emerging Payments Forum tomorrow— Barry Silbert (@barrysilbert) March 23, 2014
But Silbert, who spoke twice at the event himself, indicated the conference also reflected the increase in awareness about bitcoin and its potential to disrupt the established order in the payments industry
Three objectives
The investors he met with, Silbert said, had three objectives: to learn more about bitcoin, to better understand how to invest in the ecosystem, and lastly, to find out how their existing investments could be threatened by the ascent of bitcoin.
In conversation with CoinDesk, Silbert revealed it was perhaps this last objective that intrigued him most. He noted that a lot of the investors he spoke to were involved in the public market, and that they tended to have positions in companies like MasterCard, MoneyGram, WesternUnion and Visa.
Said Silbert:
The result was that Silbert painted the picture of an industry that, while still on the fence about bitcoin's ability to gain mass adoption, is preparing seriously for such an outcome.
The meetings by the numbers
Silbert's assessment was that many of the investors he met with have yet to decide whether they believe digital currencies will have a bright future in finance.
Silbert explained how he replicated an experiment he routinely performs during his speeches at the meetings, asking the investors to tell him whether they were skeptics, believers or still waiting for more information to decide their feelings toward the digital currency ecosystem.
Said Silbert:
The results surprised Silbert, particularly the low number of skeptics. He added: "Usually when I do speeches, I'll see skeptics skew 50% or higher."
Of course, he acknowledged that these investors weren't necessarily indicative of where the payments industry is on the whole. For example, these investors requested meetings with him, and a handful, he said, own bitcoin personally.
Notably, about one-third of the investors Silbert met with have already asked for a follow-up meeting or a follow-up call, and Silbert projects that more may do so in the days and weeks ahead.
Investors list major concerns
In total, Silbert had 18 meetings, some with as few as one investor, others with as many as four. As a result of this extensive process, Silbert indicated he was able to get a sense of why these investors have so far stayed out of the digital currency ecosystem, and the findings are positive for the bitcoin community.
Explained Silbert:
Silbert expects this to soon change, and that the Bitcoin Investment Trust, once it trades on the public market via OTCQX in Q4, will play a key role.
Added Silbert: "Most of them said that [the Bitcoin Investment Trust] would be eligible for them to invest if they chose to invest in bitcoin."
Yet another reason, however, was that both bitcoin the currency and digital currency companies remain small time compared to their usual investments.
Said Silbert:
Bitcoin is next Western Union, not Visa
Silbert also received feedback from the investors on what they believe to be bitcoin's potential to interrupt the payments space. Overall, he said, investors feel that bitcoin threatens established remittance and money order providers such as Western Union and MoneyGram.
Said Silbert:
Still, it should be noted that replacing these companies will be no small feat. Western Union, has noted it is watching the digital currency markets, no doubt in some small part to see whether it will threaten its $9bn market cap.
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