State Street Expresses Concern that Crypto Rally May Distract Investors from Traditional Gold Assets
The bitcoin rally is creating a false sense of security among investors, as per the strategist behind the original gold exchange-traded fund.
State Street Global Advisors’ George Milling-Stanley warns that cryptocurrency investments do not provide the same stability as gold.
“Bitcoin, in its essence, is a play for returns, and I believe that investors have been attracted to these return plays,” stated the organization’s chief gold strategist during an interview on CNBC’s “ETF Edge.”
Milling-Stanley’s remarks were made in conjunction with the celebration of his firm’s SPDR Gold Shares ETF (GLD) reaching its 20-year milestone. This ETF, backed by physical gold, is the largest of its kind globally and has seen an increase of over 30% in 2024.
“Gold was priced at $450 per ounce [20 years ago],” Milling-Stanley recalled. “It has since quintupled that amount. If you take a fivefold increase into account, gold should be valued at over $100,000 in twenty years.”
Gold recently recorded its best week since March 2023. Gold futures ended at $2,712.20 on Friday, marking the highest settlement since Nov. 5. The current price of gold is just 3% off the peak reached on Oct. 30.
Bitcoin, which has been on the rise since the Nov. 5 election, is also experiencing a successful year, reaching a new all-time high on Friday.
Milling-Stanley believes that investors who value the safety features of gold should reconsider their rush into bitcoin, as he believes the cryptocurrency industry is trying to imitate them.
“This is why they refer to it as mining. There is no actual mining involved. This is simply a computer-based operation,” he expressed. “But they use the term mining to draw parallels with gold — possibly to detract from gold’s appeal.”
However, he admits that it is uncertain how high the price of gold could potentially reach.
“I cannot predict the next 20 years, except to say that it will be an interesting journey,” stated Milling-Stanley. “I am confident that gold will perform well.”
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