Grayscale Investments, a cryptoasset management firm and a subsidiary of the Digital Currency Group, has recently launched an ad campaign that’s telling investors to drop gold, and instead invest on the flagship cryptocurrency bitcoin.
The campaign, called “Drop Gold,” will feature a 39-second commercial showing a man and a woman racing around a financial district, while seeing people burdened by the weight of bulky gold they’re carrying around.
The ad asks investors why they choose to put their money in gold, and questions whether they’re investing in the past. Grayscale’s ad is set to run all year on broadcast and cable networks, as well as on streaming services like Hulu.
The company’s goal is to get new buyers to put their money into its Grayscale Bitcoin Trust (GBTC) fund, which allows investors to gain exposure to the flagship cryptocurrency without actually managing bitcoin. Grayscale manages it for a fee.
— Francisco Memoria (@FranciscoMemor) May 2, 2019
According to Fortune, Grayscale CEO Barry Silbert believes investors will drop gold for BTC thanks to the ad campaign, as he believes it’s a superior store of value for being more practical and lighter than gold.
Silbert reportedly also believes new generations who grew up with the internet care less about gold, as he’s “highly confident” a 23-year-old with a gold bar would just sell it. Notably, gold’s worth if approximately of $8 trillion, while bitcoin’s market cap is below $100 billion.
Grayscale’s bet would see investors who hedge using gold, because they see it as a way to hold value superior to conventional assets like stocks and bonds, put their money in bitcoin instead of in the precious metal.
Behind the bet is what the firm believes is a generational shift in attitudes, and bitcoin’s performance so far this year. While gold has remained relatively stable, BTC has seen its value surge nearly 40%, outperforming the S&P 500 and most commodities.
Per Silbert, most investors are interested in gold because of an aggressive marketing campaign made by the World Gold Council in 2004, promoting the first gold exchange-traded fund (ETF). The ETF’s launch coincided with soaring gold prices. Grayscale’s CEO was quoted as saying:
Question what you’ve been told by the World Gold Council for the last 20 years. We’re not suggesting you should go sell your Microsoft stock and buy Bitcoin, but it should be an allocation.
Notably, Grayscale’s GBTC has been growing over time. As of December of last year, it held 203,000 BTC, over 1% of the flagship cryptocurrency’s supply. The firm’s Digital Large Cap Fund (DLC) has recently reduced its exposure to XRP, and increased it to LTC: