What the CoinDesk Acquisition Tells Us About the Industry

Digital Currency Group (DCG), the Bitcoin venture investment firm of SecondMarket founder Barry Silbert, has acquired the industry publication, CoinDesk. The editorial and business teams at CoinDesk will be relocated to New York where they will merge with DCG’s events platform, forming a new subsidiary.

Investors have poured about $2 million into CoinDesk since its launch in 2013 but the acquisition payout was only $500,000 to $600,000 after months of looking for a buyer willing to put up $1 million, according to TechCrunch. This failure to recoup its funding or even secure its exit goal, is not unusual for a startup venture, but it does show the problem with running a professional bitcoin only news publication.

The industry is still just emerging and companies are still very young, which makes getting big advertisers difficult. At the same time, bitcoin and Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term technology are attracting more media coverage from wider publications crossing over into the field such as Finance Magnates from Online Trading Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Read this Term and TechCrunch from internet technology.

Another thing that this acquisition exemplifies is that the industry is maturing, institutionalizing, and congealing into larger consortiums. DCG's portfolio includes Genesis Global Trading, an institutional-focused digital currency trading desk, and Grayscale Investments, an asset manager that manages the Bitcoin Investment Trust (Symbol: GBTC). And in its announcements the group indeed emphasises that its backing will "provide CoinDesk with financial strength, strategic flexibility, and an invaluable relationship network that extends far beyond the bitcoin industry itself."

DCG says it is committed to maintaining CoinDesk’s editorial independence, and therefore the CoinDesk team will be located in separate offices in New York following the move. The responses online to the announcement suggest that not all people believe this will be the case or that it matters considering CoinDesk's previous stance, but some friction is expected when any industry is in its growing pains.

The announcement:

Thrilled to announce Digital Currency Group’s first acquisition…@coindesk https://t.co/y7NYo79u2b

— Barry Silbert (@barrysilbert) January 13, 2016

Back in October 2015 we reported that DCG has secured investment from a number of established players in the financial industry. Among them are MasterCard, the Canadian Imperial Bank of Commerce (CIBC), Bain Capital Ventures, CME Ventures, FirstMark Capital, New York Life Insurance, Novel TMT Ventures, Oak HC/FT, RRE Ventures, Solon Mack Capital and Transamerica Ventures.