Grayscale has launched a new pro-bitcoin TV ad campaign urging investors to shun gold from their portfolio and replace it with bitcoin to avoid the debt cycle and hyperinflation challenges.
Questions arise, is it better to hoard bitcoin or gold? Grayscale has decided to make the case for Bitcoin. The cryptocurrency company has launched an unprecedented multi-million dollar marketing campaign that features a year of national TV commercials. They have labelled the campaign, “Drop Gold.” This marketing kicked off on May 1 and it includes a 39-second commercial.
The commercial shows a man and woman racing hurriedly around a financial district. On the other hand, people around them appear weighed down by heavy gold.
The ad asks:
“Why did you invest in gold? Are you investing in the past?”
Setting up Bitcoin as the New Digital Gold
The new campaign by Grayscale tries to portray bitcoin as the enhanced, digital form of gold. They say that bitcoin is better than gold. Lou Kerner, a venture capitalist, also thinks that BTC is already en-route to replace gold. He believes that Bitcoin will soon become the top store-of-value selection.
Interestingly, Bitcoin and Gold share many of the same properties of ‘good money.’ Both are verifiable, scarce, accepted across borders, and durable. Nonetheless, Bitcoin has several other advantages over its precious metal colleague. It is possible to divide BTC down to the eighth decimal place. The fraction is known as ‘a satoshi.’ Thus, it is divisible as opposed to gold that exists in the form of a bar.
Furthermore, traveling with a cryptocurrency wallet is better than carrying a bunch of gold. Gold verification needs an expert with a keen eye. On the other hand, any individual can verify a bitcoin on its public ledger. These properties show that bitcoin is superior to gold.
The founder and CEO of Digital Currency Group and its subsidiary Grayscale Investments, Barry Silbert, outlined that:
“The gold industry has done a fantastic job of marketing an overpriced metal, but Bitcoin has superior physical properties and market utility. I believe that Bitcoin will become the store-of-value for our digital age.”
Grayscale Wants Gold Dropped
The company’s sudden push to shun gold comes almost a year later after it brought in a record high volume of investments. However, that position is nothing new. Grayscale aims at the modernization of the current financial system but admits that this process is not so quick. Additionally, we reported that the company sponsored the first public trading of Bitcoin Investment Trust’s Shares.
Grayscale’s Michael Sonnenshein appeared on CNBC in 2017 to discuss how they see bitcoin as gold 2.0. The whole of last year, the company had at least $359 million in investments. That represented around 300% more than the previous year. Such improvement means that even in a bear market, bitcoin interest is still rising.
Grayscale expects an influx of new customers buying its Grayscale Bitcoin Trust (GBTC) as part of the ‘Drop Gold’ campaign. GBTC gives investors exposure to price movements via a traditional investment vehicle which is impossible through buying bitcoin directly. The trust is hosted across many large brokerage platforms like Charles Schwab, E-Trade, and Fidelity.
Is the Campaign Worth It?
Grayscale makes a valid point that replacing gold with bitcoin in your investment portfolio will yield better returns. The current market cap of gold hovers around $7.7 trillion. On the other hand, bitcoin is hovering at around $95 billion. Thus, the most popular cryptocurrency definitely has plenty of room to grow.
Evidently, achieving 10% penetration in a few financial markets can spur magnificent price jumps. Taking just 10% of the gold market would make the bitcoin price to spike to over $35,000. When portions of offshore wealth and global money supply are factored in, the price may surge to hundreds of thousands.
It is prudent for all gold hoarders to replace a portion of their portfolio with the digital alternative. Although BTC still has its risks and challenges, it is a solid hedge against hyperinflation. Also, it can protect investors against debt cycles that currently plague countries throughout the world.
