A bear market could be just the beginning of distress for most cryptocurrencies, according to a highly followed sector expert.

Barry Silbert, CEO and founder of Digital Currency Group and Grayscale Investments, also said Bitcoin the majority of the once flamboyant crypto market will no longer be worth anything.

"I do not believe in the vast majority of digital tokens and I think most will go to zero," Silbert told CNBC in a phone interview after a call to investors in grayscale.

Rising initial coin offerings helped bring the industry's market capitalization to more than $ 800 billion early last year, according to CoinMarketCap.com. Bitcoin accounted for about 50% of this total, with prices rising to nearly $ 20,000 in December 2017. In the midst of buying madness, initial coin offers, or ICOs, have become a popular means of collecting funds from eager retail investors. But they often touted a project that was not yet operational or that in some cases had turned out to be outright fraud.

"Almost every ICO was only an attempt at fundraising, but the underlying token was useless," said Silbert. "The vast majority of what is on the market will be eliminated."

This elimination is already beginning. The Securities and Exchange Commission crack down on the fundraising method last year, and President Jay Clayton several times request crypto-founders to register with the agency. Silbert applauded the SEC's actions and said most of the chips were illegal offers.

The price of Bitcoin, as well as that of other major cryptocurrencies, collapsed last year. The world's first and best-known digital currency is down more than 80 percent from its peak and trading close to $ 3,572 on Wednesday.

Still, Silbert said he was "as optimistic as ever" about Bitcoin. As an early investor, he experienced several price declines, all of which were followed by a full turnaround. Although Bitcoin has been around for a relatively short time in the last 10 years, it is already at its third fall of 80% or more of its bear market. The most recent has not rebounded yet.

Although Bitcoin saw "a very ugly technical picture," Silbert said that institutional investors continue to attract keen interest. The Digital Currency Group has made the most active start-up investments in the sector, more than three times the amount of Andreessen Horowitz, according to Pitchbook. The company owns and operates the Bitcoin Genesis Trading Brokerage and the largest digital money asset management company, Grayscale Investments.

Grayscale also launched the first publicly traded bitcoin investment vehicle, the Grayscale Bitcoin Trust, which trades under the symbol GBTC in over-the-counter markets.

Silbert sees Bitcoin as part of the increase that is based on its replacement potential. gold as a safe haven.

"As far as I'm concerned, Bitcoin has won the race to become a digital gold," said Silbert.

Younger investors do not consider gold as the same safe haven and uncorrelated as their parents, Silbert said. He cited an Accenture statistic on the investor appeal, which says $ 30 billion in Boomer wealth will be passed on over the next 20 years. Part of that is currently gold, which, according to Silbert, is predicted by a younger generation that would turn into bitcoins like a hedge.

"I'm convinced that all the gold money will not stay," said Silbert. "It goes back thousands of years, I'm sure all of this will be bitcoin."

He added that the scenario of speculative use for Bitcoin had been proven as a "strategy of purchase and preservation". But the question of when significant institutional money begins to pour in still remains. Silbert said that by 2019, the infrastructure needed for this to happen safely is finally in place. The Fidelity custody solution and other investment opportunities, such as a futures market of the Intercontinental Exchange, parent company of the New York Stock Exchange, are expected to all go into service earlier this year.

If and when sentiment changed, Silbert predicted that bitcoin prices would "go back".

"There is a certainty that institutional investors have invested money in the work and many others are considering it," Silbert said. "Until now, they wanted to make sure not to catch a knife falling down."