“Why did you invest in gold? Are you living in the past?”
So begins a new national television advertisement that urges investors to dump gold and invest in bitcoin instead. “You see where things are going,” the voiceover declares. “Digital currencies like bitcoin are the future.”
The ad comes from Grayscale Investments, the crypto investment firm behind the publicly traded Grayscale Bitcoin Trust (GBTC), up 66% this year. Grayscale has $1 billion in assets under management and offers similar investment vehicles tied to bitcoin cash, litecoin, ethereum, Zcash, and others.
Grayscale’s parent company is Digital Currency Group, the biggest crypto venture capital fund in the world. DCG owns Grayscale, Genesis Trading, and the bitcoin news site CoinDesk, and has invested in more than 145 cryptocurrency startups, including Coinbase, Ripple, Coinlist, Circle, and Protocol Labs. Barry Silbert, who founded trading platform SecondMarket and sold it to Nasdaq in 2015, is the founder and CEO of both DCG and Grayscale.
Even though the TV ad ends by advertising the Grayscale Bitcoin Trust, Silbert says, “We do not see this as a Grayscale commercial. For us, #DropGold is our ‘Got Milk.’ This campaign is first and foremost focused on starting a conversation about bitcoin vs gold. If the ad makes people want to get into bitcoin, we’re completely indifferent about how they go about doing it.”
Silbert sees the campaign as something everyone in the cryptocurrency industry should rally behind, a form of “rising tide lifts all boats” thinking. Still, the ad ends with the narrator saying, “Go digital. Go Grayscale.”
The ad will begin airing nationally on linear cable and business news networks in the next week, plus on OTT streaming video platforms like Hulu.
Why frame it as bitcoin vs. gold?
Grayscale’s ad may leave viewers wondering, Why pitch bitcoin as a gold alternative? Gold is a physical commodity with hundreds of years of history; bitcoin is a digital currency created in 2009 that few Americans understand.
Silbert says it’s a response to long-entrenched framing of gold as an investment class. “There has been a very strong marketing push from the gold industry that gold is the only and the best store of value in periods of economic uncertainty,” he says. “That may be true. But now you have bitcoin, which, in our opinion, provides all the same attributes as gold—it’s fungible and scarce and you can’t counterfeit it—but the big difference is that bitcoin actually has utility. Gold doesn’t have much utility beyond jewelry. And gold doesn’t have the accessibility. Anyone with internet can access bitcoin. So what bitcoin may lack in history, it more than makes up with utility and accessibility.”
Of course, very few mainstream retailers accept bitcoin as payment. But using bitcoin to pay for goods is not what Silbert means by utility.
“We’re not making the pitch that you should buy your coffee with bitcoin,” he says. “We are saying that bitcoin is better at doing gold’s job than gold has been in the past few decades. We believe that in the long run, bitcoin will be a better store of value than gold.”
The ‘store of value’ case
That argument may not carry much weight with crypto critics. Bitcoin is indeed up 113% over the past two years, while gold is up just 2.5% in that time. Bitcoin believers also like to point to how much the coin is up over a much longer period: 1,130% in the past five years. But the “store of value” argument wasn’t so convincing for bitcoin in 2018, when it fell more than 70% in value.
Silbert acknowledges that bitcoin’s volatility has concerned mainstream investors. But he’s confident bitcoin will prove itself as a store of value, and sees that use case—not its use as a daily currency, and not even the much-hyped applications of the underlying blockchain technology—as the primary way to take it mainstream.
“I hope one day we’re using distributed ledger and blockchain to do all the things people say it will do,” Silbert says, “but there is still limited traction around the use of blockchain for anything other than speculative purposes. The store-of-value use for bitcoin is the best use case. So we are hopeful that the industry will embrace and get behind this.”
Daniel Roberts covers bitcoin and blockchain at Yahoo Finance. Follow him on Twitter at @readDanwrite.