“Then they fight you…” Why the Gold Industry Can’t Stop Talking About Bitcoin

Gold, Bitcoin

By HVY Journalists: “First they ignore you, then they laugh at you, then they fight you, then you win.”

This quote, often misattributed to Gandhi, perfectly sums up the narrative of bitcoin since its inception ten years ago.

After a decade of being ignored, dismissed, and laughed at, bitcoin is firmly in the third stage: “then they fight you.”

Nowhere is this more clear than the gold industry. In a snap reaction to bitcoin investment firm Grayscale’s #DropGold campaign, gold bugs have launched a tirade of defensive adverts and messaging against bitcoin.

The message is clear. Traditional investors are scared of bitcoin. The nascent cryptocurrency is a real threat to the entire gold industry and they know it.

#DropGold for bitcoin: the campaign terrifying the gold industry

Grayscale, which holds roughly 1 percent of all bitcoin supply, launched a provocative campaign earlier this year, prompting investors to #DropGold in their portfolio and replace it with bitcoin.

The campaign generated widespread coverage on mainstream financial media. And the message is clearing hitting home with major investors. In this CNBC exchange, two traditional traders advocate a small bitcoin holding:

“Usually in a portfolio, gold is about 5-10% of the portfolio so there’s nothing wrong with saying bitcoin couldn’t be 5-10% of a portfolio right now.”

The movement is spreading. In a delicious twist of irony, one of the leading gold news outlets polled its users on their future-proof investment choice. The answer was resoundingly bitcoin:

A CNBC poll revealed the same result:

Gold bugs launch a huge counter-campaign

If bitcoin wasn’t a threat, the gold industry would have ignored it or laughed it off.

But they didn’t. They fought back.

GoldMoney CEO bizarrely claimed bitcoin was heavier than gold and wrote an entire white paper attacking bitcoin.

An analyst from GAMCO, which operates a large Gold trust, slammed bitcoin because it wasn’t “a creation of God,” like gold, apparently. 

Kitco and Goldmoney both pinned arguments against bitcoin at the top of their Twitter feeds.

Gold analyst Dan Popescu slammed the “bitcoin cartel” and falsely claimed that a government could shut down the Bitcoin system. 

At the recent SALT conference, infamous gold bug Peter Schiff appeared visibly defensive, desperate, and argumentative trying to defend gold against Grayscale’s Barry Silbert. This interview reveals exactly how nervous the gold industry is about bitcoin’s rise.

Is bitcoin digital gold?

“Digital gold” has emerged as bitcoin’s defining narrative in recent years. Like gold, bitcoin has a limited, scarce supply and a lack of correlation to stock markets. Additionally, it has utility and is more portable than gold.

The attributes give bitcoin a “store of value” function in a digital world. Some recent reports even linked bitcoin’s latest rally to a rise in geopolitical tensions and declining stock market. In other words, traders might be treating bitcoin like a safe haven, much like gold.

Gold bugs clearly see bitcoin as a rising threat as they mount a high-profile fight. But we all know what comes next:

“First they ignore you, then they laugh at you, then they fight you, then you win.”