Barry Silbert, the founder of crypto conglomerate Digital Currency Group, has joined a growing list of industry leaders in trying to settle investors’ nerves after the sudden collapse of FTX.
In a note to shareholders on Tuesday, Silbert addressed all the “noise” about the financial health of DCG’s subsidiaries, which includes trading firm Genesis, Grayscale Investments and mining company Foundry.
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Since FTX’s rapid winddown two weeks ago, investors have worried about a crypto contagion affecting every corner of the industry. Lenders have stopped lending, withdrawals have been more difficult and unregulated, little-understood tokens have plunged in value. The leading cryptocurrencies, bitcoin and ether, have also continued their year-long descent.
Silbert, an early bitcoin evangelist who founded DCG in 2015, said that despite the crypto winter, the overall company is on pace to generate $800 million in revenue this year on the back of just $25 million raised in primary capital since inception. Forbes estimates Silbert’s net worth at $2 billion.
“We have weathered previous crypto winters,” Silbert wrote, adding that “while this one may feel more severe, collectively we will come out of it stronger.”
Coinbase, Binance and Crypto.com have similarly done their best to assuage customer concerns to avoid an FTX-type run on customer deposits. They’ve each expressed shock at FTX’s apparent deceit of investors and customers and emphasized that client assets are secure.
That’s all with an awareness that FTX and founder Sam Bankman-Fried betrayed the trust of an industry that was already in the midst of a brutal year of losses. Bankman-Fried said his company’s assets were “fine” two days before he was desperate for a rescue because of a liquidity crunch.
Specific to DCG, investor confidence took a hit in the last week, when the Wall Street Journal reported that Genesis had been trying to raise $1 billion from investors before ultimately halting some withdrawals. There were reports that Genesis would soon file for bankruptcy, which the company publicly refuted.
Fear spread to the Grayscale Bitcoin Trust, known by its ticker GBTC, which lets investors get access to bitcoin through a more traditional security. GBTC is currently trading at a 42% discount to bitcoin, up from a discount of closer to 30% two months ago.
Regarding Genesis’ lending business, Silbert said in the letter that the suspension of redemptions and new loan originations on Nov. 16 was “an issue of liquidity and duration mismatch” in the loan book. These issues, he said, had “no impact” on Genesis’ spot and derivatives trading or custody businesses, which “continue to operate as usual.”
He acknowledged that Genesis has hired financial and legal advisors, as the firm considers its options.
DCG’s debts amount to just over $2 billion. The company loaned Genesis roughly $575 million, priced at “prevailing market interest rates,” which is due in May 2023. It also absorbed the $1.1 billion debt that the bankrupt crypto hedge fund Three Arrows Capital owed Genesis.
With Three Arrows in bankruptcy, DCG “is pursuing all available remedies to recover assets for the benefit of creditors,” Silbert wrote. DCG’s only other debt is a $350 million credit facility from “a small group of lenders led by Eldridge.”
Read the full letter from Silbert below:
Dear Shareholders,
There has been a lot of noise over the past week and I want to get in touch directly to clarify where we stand at DCG.
Most of you are aware of the situation at Genesis, but to recap up front: Genesis Global Capital, Genesis’ lending business, temporarily suspended redemptions and new loan originations last Wednesday, November 16 after market turmoil sparked unprecedented withdrawal requests. This is an issue of liquidity and duration mismatch in the Genesis loan book. Importantly, these issues have no impact on Genesis’ spot and derivatives trading or custody businesses, which continue to operate as usual. Genesis leadership and their board decided to hire financial and legal advisors and the firm is exploring all possible options amidst the fallout from the implosion of FTX.
In recent days, there has been chatter about intercompany loans between Genesis Global Capital and DCG. For those unaware, in the ordinary course of business, DCG has borrowed money from Genesis Global Capital in the same vein as hundreds of crypto investment firms. These loans were always structured on an arm’s length basis and priced at prevailing market interest rates. DCG currently has a liability to Genesis Global Capital of ~$575 million, which is due in May 2023. These loans were used to fund investment opportunities and to repurchase DCG stock from non-employee shareholders in secondary transactions previously highlighted in quarterly shareholder updates. And to this day, I’ve never sold a share of my DCG stock.
You may also recall there is a $1.1B promissory note that is due in June 2032. As we shared in our previous shareholder letter in August 2022, DCG stepped in and assumed certain liabilities from Genesis related to the Three Arrows Capital default. As stated in August, because these are now DCG liabilities, DCG is participating in the Three Arrows Capital liquidation proceedings on the Creditors’ Committee and is pursuing all available remedies to recover assets for the benefit of creditors. Aside from the Genesis Global Capital intercompany loans due in May 2023 and the long-term promissory note, DCG’s only debt is a $350M credit facility from a small group of lenders led by Eldridge.
Taking a step back, let me be crystal clear: DCG will continue to be a leading builder of the industry and we are committed to our long-term mission of accelerating the development of a better financial system. We have weathered previous crypto winters and while this one may feel more severe, collectively we will come out of it stronger. DCG has only raised $25M in primary capital and we are pacing to do $800M in revenue this year.
I bought my first bitcoin a decade ago in 2012 and made the decision that I would commit to this industry for the long term. In 2013, we founded the first BTC trading firm – Genesis – and the first BTC fund, which evolved into Grayscale, now the world’s largest digital currency asset manager. Foundry runs the largest bitcoin mining pool in the world and is building tomorrow’s decentralized infrastructure. CoinDesk is the industry’s premier media, data, and events company and they have done phenomenal work covering this crypto winter. Luno is one of the most popular crypto wallets in the world and is an industry leader in the emerging markets. TradeBlock is building a seamless institutional trading platform and as the newest subsidiary, HQ is establishing a life and wealth management platform for digital asset entrepreneurs. Each of these subsidiaries are standalone businesses that are independently managed and are operating as usual. Lastly, with a portfolio of 200+ companies and funds, we’re often the first check for the industry’s best founders.
We appreciate the words of encouragement and support, along with offers to invest in DCG. We will let you know if we decide to do a financing round.
Despite the difficult industry conditions, I am as excited as ever about the potential for cryptocurrencies and blockchain technology over the coming decades and DCG is determined to remain at the forefront.
US President-elect Donald Trump speaks during a meeting with House Republicans at the Hyatt Regency hotel in Washington, DC on November 13, 2024.
Allison Robbert | AFP | Getty Images
President-elect Donald Trump on Saturday selected Liberty Energy CEO Chris Wright to serve as the next energy secretary of the United States.
Liberty Energy is an oilfield services company headquartered in Denver with a $2.7 billion market capitalization. The company’s stock gained nearly 9% on Nov. 6 after Trump won the U.S. presidential election, but its shares have since pulled back.
Wright serves on the board of Oklo, a nuclear power startup backed by OpenAI CEO Sam Altman that is developing micro reactors.
Wright will also serve on Trump’s Council of National Energy, the president-elect said Saturday. The council will be led by Trump’s pick for Interior Secretary, North Dakota Gov. Doug Burgum.
Wright has denied that climate change presents a global crisis that needs to be addressed through a transition away from fossil fuels.
“There is no climate crisis and we’re not in the midst of an energy transition either,” Wright said in a video posted on his LinkedIn page last year. “Humans and all complex life on earth is simply impossible without carbon dioxide. Hence the term carbon pollution is outrageous.”
“There is no such thing as clean energy or dirty energy,” Wright said. “All energy sources have impacts on the world both positive and negative.”
Trump described Wright as a “leading technologist and entrepreneur in the energy sector.”
“He has worked in Nuclear, Solar, Geothermal, and Oil and Gas,” the president-elect said in a statement Saturday.
“Most significantly, Chris was one of the pioneers who helped launch the American Shale Revolution that fueled American Energy Independence, and transformed the Global Energy Markets and Geopolitics,” Trump said.
The U.S. has produced more crude oil than any other country in history, including Russia and Saudi Arabia, since 2018, according to the Energy Information Administration.
Kubota says its new KATR farm tractor concept raises the bar in autonomous, zero-emission farming – and it looks like they’ve convinced others, too. The robot just won “Best of Innovation” at the CES Innovation Awards.
Built as a follow-up to last year’s New Agri Concept electric autonomous farm tractor, the new Kubota KATR is a first of its kind, compact, four-wheeled robot with a stable cargo deck platform and stability control features that allow it to conduct work in demanding off-road agricultural and construction work environments, even on extreme hills and slopes.
The KATR was named best in the Industrial Equipment and Machinery product category by a panel of industry expert judges, including media, designers, and engineers who reviewed submissions based on innovation, engineering, aesthetics, and design.
Kubota seems pretty proud of themselves – and rightly so. “We have a long-standing philosophy that our products must be technically excellent, be productive and enjoyable for our customers, and also ensure the sustainability of limited resources. Ultimately, our goal is to improve the quality of life for individuals and society,” said Brett McMickell, Kubota North America Chief Technology Officer. “Given the versatility of the KATR, it has a wide range of applications specifically designed to enhance productivity in the agriculture and construction sectors.”
The KATR is designed to be powertrain agnostic – meaning it can be configured with either an electric or combustion engine, “reflecting Kubota’s commitment to customer choice without compromise.” As shown, it offers a load capacity of approx. 285 lbs. (just under 130 kg) and can be operated either remotely or with an onboard controller.
The CES Innovation Awards program is owned and produced by CTA, the host and organizer of the Consumer Electronics Show (CES), which is recognized worldwide for its innovation awards as it is the most influential tech event on a global stage. CES 2025 is set to run from January 7-10, 2025, in Las Vegas, Nevada – and, of course, we’ll be there (again).
Electrek’s Take
Population growth, while slowing, is still very much a thing that is happening – and fewer and fewer people seem to be willing to do the work of growing the food that more and more people need to eat and live.
We got to ride a pre-production model of a striking new e-bike/e-moped, the Owlet One, with lots of power in a small package.
We first met Owlet at Electrify Expo in Long Beach, CA, where we only had a couple minutes on its bike. But since the company is headquartered nearby in Los Angeles, they emailed us asking if we’d like a longer test ride, and delivered a bike to us for to spend a few hours on this time.
Just to set the stage for this ride: Owlet is a new brand, preparing to ship its first bike. So to start off, we rode a prototype, not the finished version. This means it may come with different features, and we’re not entirely sure when it will ship, either.
The first thing to notice about the Owlet One is its design, which certainly stands out immediately. The bike is made of aviation-grade aluminum, though is still quite hefty, tipping the scales at 84 lbs (but it felt even heavier in our hands).
On top of Owlet’s striking design, the bike is also somewhat of a unique shape and size. Despite offering a format that looks similar to an e-bike at first glance, it rides more like a small moped. This actually puts its 84lb weight into a different perspective – rather than being heavy for a bike, it can be thought of as light for a moped.
But photographs can’t encapsulate everything about the design of the Owlet, because it has one totally unique feature: an adjustable wheelbase.
This can be done by one person in under a minute, though requires a socket wrench and a small amount of elbow grease.
In practice, I found that the adjustable wheelbase probably won’t come up much for riding purposes. The longest wheelbase (or close to it) was the most comfortable and stable to me, and shorter wheelbases were a bit more of a novelty, especially on this powerful bike which can get a little squirrelly on the shorter settings.
Another issue is that it changes the angle of the kickstand, which means you can’t really use the kickstand outside of a narrow wheelbase range. The final bike will supposedly have a different kickstand design, but this will likely be an issue regardless of how it’s redesigned.
But it was good for making the bike small enough to fit into places you might not normally be able to fit a moped-style bike. Between its narrow handlebars and shrunk down to its smallest 44-inch-long setting, it fit into the back of both a Tesla Model Y and an Audi A3 wagon (both with seats down), but not quite into a Model 3 – which I’ve fit multiple normal-sized bikes into the back of, though with the front wheel removed. Though its hefty weight does mean it can be awkward to lift the bike in there in the first place.
And it’s got more power than you’d expect out of most e-bikes too. With a 750W motor (3000W peak), there’s plenty of get up and go, and plenty to keep you going even as you reach closer to its 30mph top speed. This top speed can be lowered through the bike’s computer, to fit your local regulations.
Speaking of regulations, the bike is officially categorized as a motorized scooter, rather than an actual e-bike, as it doesn’t have pedals. It’s in a similar category to electric kick scooters, so you need to have any class of driver’s license to ride it, though it can be used either on or off public roads (but check your area’s regulations for sidewalk use, helmet requirements, and so on).
The shrouding on the front fork does restrict turning radius, but only when walking the bike in tight corners
The throttle we tested was a thumb throttle, though we would have preferred a twist throttle. The thumb throttle is just too twitchy, and on a bike with such peaky acceleration, it could get jumpy. This was especially true with shorter wheelbase settings. Owlet says there will be an option for a twist throttle when the bike ships, but we’d also like to see the software moderate acceleration on the very low end even with the thumb throttle.
And the bike is fully throttle-driven – there are no pedals, only pegs. Owlet plans to offer an option for pegs attached to the front to allow a different, more laid-back seating position.
The motor, kickstand and pegs. This is the final wheel design, rather than the traditional spoked design in Owlet’s press photos above
I tested the bike with a few accessories I had laying around, but because of the Owlet’s unique design, not all of them would fit (the handlebar cupholder seen in some of my photos doesn’t come with the bike, for example, which has no bottle cage mount). You’ll probably want a backpack if you’re planning to carry things on this bike, rather than saddlebags or the like.
The bike’s owl-like headlights fit well with the brand name. The charging outlet is in the “beak”
Owlet says the bike’s 1500Wh battery (made with 2170-format cells) can take you around 40-60 miles, and comes with a 350W charger for a ~5 hour charge. Based on our test ride, we think this range is reasonable or perhaps even conservative – but I’m also a pretty lightweight rider at 155lbs, and always remember that e-bike ranges vary widely depending on terrain and rider.
The seat has a very cool look to it and is comfortable to sit on, partially due to integrated seat suspension. The front fork also has 3.5 inches of suspension travel. I’d have liked for both suspensions to be a little looser, but that is again likely due to my relatively light weight.
All of this comes with a caveat: we rode a prototype here, not a final bike. So the bike was missing some final features, some features weren’t working (like the headlight), and so on. Owlet says that specifically the LCD and foot stands will be changed, but we imagine other tweaks are possible (we hope one of the LCD changes makes it easier to read with polarized sunglasses – it was a bit tough, which is true of many, but not all, bike computer screens).
Owlet also has plans for a future bike, the Owlet 2, which is more solidly in the moped category, with a less wild design and higher range and top speed. Owlet shared an early prototype fact sheet with us, but given the One is already a bit of a ways out from delivery, don’t hold your breath for the 2 yet.
In short, the Owlet is a fun, quirky ride with a very design-forward ethos. If you’re looking for a bike that doesn’t look like any other, it could be worth looking into. Though it’s definitely on the unorthodox side and you have to be willing to accept its eccentricities when compared to more conventional two-wheeled devices.
The company is taking $50 refundable deposits for its bike, which it has said it wants to ship around March – but it also says that it’s waiting for a minimum batch quantity of preorders first, and that shipments would take 3-6 months after that, so we imagine March could be optimistic. If you want to get in line, you can reserve one here.
The bike will cost $3,995, though early reservers can get it for $2,995, along with an engraved serial number and a 1 year warranty/service package. Owlet wants to have service locations around LA and possibly one in New York, to begin with. It will distribute the bikes by shipping them directly to customers.
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