-
Casinos for you
The World Gold Council Defends Against The Onslaught Of Digital Invaders
By Shane Addinall Nov 20, 2019 OpinionThe World Gold Council fire back at Grayscale’s Drop Gold ad campaign with a meaty report on the present and future value of the mineral – but does the data truly support their case?There is a lot to be said for the court of public opinion. Well-Placed speculation can see any investment vehicle suddenly see an upturn as Joe Public grab hold of some media titbit and either flock to or flee from the asset in question.
This was the intention behind the headline-grabbing media campaign by Grayscale Bitcoin Trust earlier this year entitled “Drop Gold”.
✓Why Drop Gold?
Grayscale label themselves as a “trusted authority on digital currency investing” we can expect them to be biased towards Bitcoin and cryptocurrencies.
However, their Drop Gold campaign asks from interesting questions of the worlds oldest mineral-based investment vehicle. Questions like “Why are you investing in gold?” and “Are you living in the past?”, and they even chose to get a little spicy with flippant remarks that refer to gold as a “nice rock”.
Their assertion is that gold should be left to the jewellery industry not kept as an investment vehicle. The USA dropped gold as its standard in the 70s, it is not a viable transactional tool, offers low growth potential and simply does not measure up to the Bitcoin in any area.
So, what is it that Grayscale offer? In short, they promote the idea of managed investment accounts, like you currently have for regular fiat-based investment portfolios, only with your portfolio being made up exclusively of digital currencies including Bitcoin.
✓Grayscale Strike A Nerve
While many people used to the online shenanigans of marketing executives most likely wrote these off as gimmicks not really giving them much attention it seems to have struck a nerve in their competitors, World Gold Council.
The Council hit back at Grayscale’s ad campaign with a meaty audit style review highlighting the emotional, financial and future-proof value of gold as a viable long-term investment.
As with Grayscale, it is worth noting that the Council has a vested interest in the product they are evangelising for, be sure to take their insights with a grain of salt. Starting with the scope of their report – for an expansive report with such highlights as “global survey” it only covered 18,000 respondents across 6 countries (India, China, USA, Germany, Canada and Russia). This is hardly a large enough cross-section of any one of these regions let alone all six to make any kind of value recommendation from.
✓Primary Lesson From The Gold Study
The report includes a lot of subjective language that leans towards showing that gold is still deemed a safe and secure investment vehicle by most age groups with a notable drop off in the 18-38 age bracket.
In particular the 18-24 age bracket showed little interest in long term slow burn investments choosing instead to err towards living for the now not the future.
The Council addressed this stating that:
“Gen Z’s live-for-today, risk-taking attitude is most evident in their exposure to other investments, rather than in the exclusion of gold – [cryptocurrencies] is significantly skewed towards short-term and speculative needs, in contrast to gold which is skewed towards long-term and wealth preservation needs”
Yet despite that statement the data they collected in their own survey found that less than 22% of the respondents in the 18-22 bracket considered cryptocurrencies as “speculative” or “high-risk” to them digital coins are simply part of the investment ecosystem they grew up with.
✓Does Gold Need To Worry?
The recent Bitcoin awareness survey by Blockchain Capital compared both the “awareness of” and “interest in purchasing” Bitcoin across the generations from Fall 2017 to Spring 2019, the results speak for themselves:
Overall Interest:
- Increased from 19% to 27%
Interest By Age Group:
- 18-34: up from 32%-42%
- 35-44: up from 34%-35%
- 45-54: up from 15%-25%
- 55-64: up from 9%-16%
- 65+: up from 4%-8%
While there will always be those who invest in gold, the reality is that cryptocurrencies become more mainstream. The greater this mainstream adoption becomes the more likely it will be to divert more revenue from mineral and fiat currency-based investments into future-facing platforms like Grayscale.
You might also like