Grayscale’s Director Talks About the Good Old Bitcoin vs Gold Battle

Digital currencies get wider adoption and regulations regarding them become more clear. However, many traditional investors see the technological intricacy underlying cryptocurrencies as murky water. A week ago, CEO of Euro Pacific Capital and well-known Bitcoin critic and gold bug Peter Schiff hit the headlines in the crypto community, blaming Bitcoin for losing access to his wallet due to his mistake of confusing his pin with his password. Binance CEO Changpeng Zhao later commented, that Bitcoin apparently ”needs more” advertising from people such as Peter Schiff.

As Bitcoin and cryptocurrency still present a challenge for many investors, companies such as Grayscale Investments bridge this gap and act like an investment banker, managing investors’ digital assets. According to reports, last year Grayscale registered more than $600 million in crypto investments. In the latest episode of the Rational Reminder podcast, Michael Sonnenshein, Managing Director at Grayscale Investments, detailed the features of digital currencies as an asset class and Grayscale’s benefits for investors.

Elaborating on the reasons which drive investors towards financial instruments which allow exposure to the digital asset class, Sonnenschein said that when considering Bitcoin as an investment opportunity investors need to verify the trustworthiness of the party from which they are buying Bitcoin. Even though Bitcoin can be bought individually, technical details still remain a tough barrier for many.

He further stated:

“You will also need to have the technological know-how to be able to move the bitcoin to a wallet, to be able to keep your password secure and be able to safe-keep it on a longterm basis. And for most investors, that is a new and unfamiliar experience.”

He also explained how the Grayscale products help resolve these issues and allow investors to get exposure to digital assets in “a way that feels super traditional or more akin to their experiences with investing in other financial instruments.”

The conversation also touched Bitcoin versus gold, and which is a better store of value and inflation hedge. Sonnenschein commented, that the main differences between Bitcoin and gold lie in Bitcoin’s greater divisibility, portability and quite versatile utility.

“Bitcoin lends itself to amazing applications, most of which we barely scratched the surface on, whereas gold has really become an asset that’s primarily held by central banks and governments and has very limited utility.”