By Greg Wilson, analyst, Palm Beach Daily
When I walked into the conference room, the first thing I saw was a Plinko board.
The game operator was offering prizes. And the gimmick worked… So I headed over to the booth.
Now, you may know Plinko from the long-running game show, The Price Is Right. It’s a fan favorite.
Contestants are given flat chips to drop down the board’s maze. You aim for the prize you want, release a chip, and watch it bounce down the slots until it reaches a prize.
But this wasn’t The Price Is Right. And Bob Barker wasn’t bellowing, “Come on down!”
Instead, I was at Consensus 2019 in New York. It’s the biggest crypto conference of the year. With over 7,500 attendees, 250-plus speakers, and hundreds of sponsors, it brings the whole industry together.
And the game operator was Grayscale Investments, one of the world’s largest crypto asset managers. It has $2.7 billion in assets under management.
I won a pair of cool socks. But what really caught my eye was Grayscale’s message on the board: “Drop Gold.”
An ad for Grayscale’s “Drop Gold” campaign
Frankly, I was a bit taken aback. Gold has been around for 5,000 years. And it’s a good hedge against the world’s fiat currency system collapsing.
But today, I’ll share why the Plinko board was right—and why you should consider reallocating some of your gold position to bitcoin…
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Bitcoin Is the Future
Regular Daily readers know we recommend holding up to a 5% allocation of precious metals—including gold—at PBRG.
You see, if society breaks down, that 5% allocation could end up becoming more valuable than the other 95% of your investment assets.
Now, if you’re convinced gold is going significantly higher, we don’t disagree with you. But we’d also encourage you to set aside part of your gold allocation to bitcoin. And Grayscale agrees…
The firm believes gold has maintained its status as scarce, fungible, and recognizable back from the past. But our world is vastly different now. So gold’s status as the ultimate store-of-value asset needs to be questioned.
Here’s Grayscale’s reasoning:
- Gold is the past… President Nixon dropped the gold standard in the 1970s. Gold is heavy (25.7 pounds for a standard bar). It’s not easy to move around—and you have to worry about storage.
- Bitcoin is the future… It’s electronic, fraud-resistant, and accessible to everyone.It’s borderless and secure. And it can be sent around as easily as a text message.
The numbers back this up, too…
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Boosting Your Portfolio
Bitcoin is up about 175% since the start of the year—despite all its volatility. Yet gold is only up about 18%.
More importantly, an allocation of bitcoin to your portfolio would outperform a similar one to gold.
For example, let’s compare a portfolio of 95% stocks and 5% gold to one with 95% stocks and a split of 4% gold and 1% bitcoin.
As you can see in the chart below, the portfolio with bitcoin would’ve made you nearly $20,000 more over the past five years…
With these results, it’s hard to argue against selling some of your gold and adding bitcoin instead.
Now, Grayscale recommends its clients add bitcoin exposure through its Grayscale Bitcoin Trust (GBTC). But here’s why this isn’t an ideal solution…
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Well, neither would we. And that’s the problem with GBTC. It always trades at a premium (often of 100% or more) to its net asset value…
Let’s say GBTC is trading at $12 with a 100% premium built in. This means buyers are only getting $6 worth of bitcoin for each $12 share. So you’re starting off with a 50% loss.
No matter how well an asset performs, you won’t do well by paying 100% premiums for it.
That’s why we have a better way: Simply buy bitcoin (BTC) and learn how to store it yourself. You’ll avoid premiums and essentially be your own bank.
If you don’t know how to get started, don’t worry…
Palm Beach Confidential subscribers can learn how to buy, store, and trade bitcoin—and dozens of other cryptos—in our new and improved Crypto Corner.
And for those who aren’t subscribers yet, world-renowned cryptocurrency expert and Daily editor Teeka Tiwari is offering a free, week-long crypto training series. It’s available for anyone who registers for his live crypto webinar.
During the event, on Wednesday, September 18, Teeka will reveal a little-known phenomenon that’ll boost the entire crypto market in the coming months. And he’ll share details about five cryptos he believes will profit most.
Teeka is also giving away the name of his new No. 1 crypto pick of 2019 live during the webinar. Don’t miss out on the chance to become a crypto millionaire.