The World Gold Council has come back fighting a day after Grayscale launched its #DropGold campaign in which it claims bitcoin was a better store of value than the precious metal.
The council tweeted, “Cryptocurrencies are no replacement for gold. ” It is hardly a compelling argument even if the value of the gold market is around $7.8 trillion and the bitcoin market is valued at around $97.2 billion at the moment.
Gerelyn Terzo at CCN writes: “The team at the World Gold Council probably didn’t know what hit them when the phones most likely started ringing off the hook with calls from people wanting to learn more about this digital gold called bitcoin.”
It responded by publishing a blog written by Adam Perlaky, who clearly thinks Grayscale is just plain wrong. He sets out his argument to show gold’s superiority with the following:
- is less volatile
- has a more liquid market
- trades in an established regulatory framework
- has a well understood role in an investment portfolio
- has little overlap with cryptocurrencies on many sources of demand and supply
- is a safe-haven investment.
Cryptocurrencies he believes are “volatile” compared with gold. He writes:
- Cryptocurrencies extreme daily and intraday volatility disrupts its use as a medium of exchange and discourages strategic investments
- Gold’s volatility is slightly above the stock market as a whole, in line with most fiat currencies over time.
But they do acknowledge that while bitcoin only has a 10-year history and gold has been around since 600 B.C. Bitcoin’s share of the store-of-value pie is only going to expand.
And as Terzo points out, “By acknowledging crypto as a competitor to gold, however, the Council just revealed that it considers bitcoin as a threat.”