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Bitcoin on Wall Street?

Wall Street is about to embrace bitcoin in a big way, said Barry Silbert, founder and CEO of SecondMarket. 

"We are in the early stages of this institutional money buying bitcoin and finding digital currencies as a new asset class," he said at the Exponential Finance conference on Wednesday.

Silbert's firm already has partnered with Fidelity Investments so that Fidelity's customers can invest funds from their self-directed IRAs in SecondMarket's Bitcoin Investment Trust.

Silbert, who is a bitcoin investor, said there are essentially five phases to the digital revolution in currency.

The first phase was in 2008 when value started being associated with the digital currency. The second, "early adopter" phase began in 2011. Businesses began developing around its infrastructure—including mining operations, merchant processing and exchanges. 

We are currently in stage three, Silbert said, which is the capital phase. This phase started in 2013, when venture capital money started pouring into bitcoin start-ups.

"Firms are going to start trading it and investing in it and then that will eventually lead to phase five, which is mass consumer adoption," Silbert said. 

That last phase will likely begin in 12 to 24 months, he said. 

"Phase five is not possible until all the pieces of the puzzle have been funded and we have these fantastic products that make it easier to buy and use bitcoin," he said. "So the Wall Street money will likely kick off stage five."

A growing number of retailers in the U.S. and around the world are already embracing bitcoin as a form of payment. Over 60,000 businesses in the U.S. currently take bitcoin, and that number is only going to grow because the transaction costs are cheaper, Silbert said. 

"The question for businesses isn't why should I accept bitcoin, the question will be why wouldn't I accept bitcoin?" Silbert said.