Grayscale Investments, a subsidiary of Digital Currency Group, launched a provocative ad campaign on Wednesday, challenging investors’ traditional beliefs around gold investing.
Employing social-media hashtags like #DropGold, the campaign attempts to challenge the yellow metal’s place in an investor’s portfolio, championing bitcoin — the world’s most famous cryptocurrency — as a superior alternative for those aiming for investments uncorrelated to other assets like stocks traded on the S&P 500 index SPX, +0.10% and the Dow Jones Industrial Average DJIA, +0.15%
“It’s time for people to start having a conversation,” said Barry Silbert, founder and CEO of Digital Currency Group, in an interview with MarketWatch. “There’s about to be a large sum of money passed down generations and investors need to question where it goes and how it should be allocated.”
Check out the advertising campaign, Drop Gold,
Silbert, a luminary in the digital currency sector, launched DCG in 2015 and was an early investor in companies such as Coinbase and Ripple. Today, the company has over 140 organizations in its portfolio, spanning more than 30 countries. Grayscale Investments is the world’s largest digital currency asset manager and operates the Grayscale Bitcoin Trust (GBTC).
Read: Should your portfolio include bitcoin? Yes, but just a 2% position, says analyst
The campaign seeks to highlight gold’s flaws, homing in on its clunkiness and touts bitcoin as more secure and borderless. To kick things off, the ad first asks: “Are you living in the past?”
“We wanted to create a compelling, provocative, and illustrative story to showcase the absurdity of gold in our modern world,” said Michael Sonnenshein, managing director at Grayscale Investments, adding that #DropGold is a “call to action.”
Gold has been the go-to haven asset for hundreds, if not thousands, of years during times of market turmoil — a time-tested relationship that could speak to the challenges confronting digital assets aiming to knock bullion from off its perch.
But with growing popularity of the opaque industry, there’s a growing consensus that the cryptocurrency can fulfill this hedge against turmoil — with an bonus. “Gold bugs tout it as a hedge against a financial apocalypse,” said Silbert.
“Bitcoin can be that and an investment in technology too.”
But, gold bugs and crypto skeptics aren’t having any of it. Renowned bitcoin skeptic Nouriel Roubini, professor of economics at the NYU Stern School of Business, echoed these sentiments in an email to MarketWatch, saying gold’s history is too much for bitcoin to contend with, concluding that it is a “pipe dream” that bitcoin would ever content with gold.
Furthermore, the World Gold Council told MarketWatch: “In our view gold is very different from cryptocurrencies, as gold is less volatile and enjoys a more liquid and established market.”
However, Silbert said these arguments are all part of a “mythical mystique” gold has carved out for itself, adding in a news release that the gold community has done a “fantastic job of marketing an overpriced metal but bitcoin has superior physical properties and market utility.”
Read: Nouriel Roubini says bitcoin is ‘bulls–t’ and only attracts ‘suckers’
Of late, bitcoin BTCUSD, +0.78% has taken the shine off gold with the digital asset up more than 40% on the year, while gold prices are up less than 1%. But the 12-month story a little different with bitcoin down around 50%, while gold GCM9, -0.21% has lost nearly 3%.
Bitcoin v Gold year-to-date
Silbert emphasized that the campaign was a bitcoin versus gold story, not crypto versus gold, spotlighting the first digital asset as the dominant one among hundreds of other cryptocurrencies that have emerged over the past few years. The early adopter, and oftentimes promoter, has previously said 99% of cryptocurrencies were “going to zero.”
Read: Barry Silbert says bitcoin put in its 2018 low, but 99% of cryptos are worthless
The campaign was described by Silbert and Sonnenshein as a “multimillion-dollar investment,” but they declined to specify. The advertisement is intended to air across a variety of outlets, including network television.
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