Interviews
Investors Are Not Choosing Bitcoin Over Gold - State Street Global Advisors
(Kitco News) - Bitcoin’s wild volatility, as prices swing within a $2,000 range, is one of the reasons why the digital currency should not be compared to gold, according to one market analyst.
Bitcoin’s surge to nearly $8,000 in recent weeks has led some analysts to speculate that it is taking interest and capital away from gold, which has languished in a tight range between its 100-day and 200-day moving averages. However, George Milling-Stanley, head of gold investments at State Street Global Advisors, said that this theory is nothing but the latest urban myth.
“It’s a myth of epic proportions on the same level as alligators in New York sewers,” he said. “I have talked to many financial advisors and investors and no one has said that they are selling their gold to buy Bitcoin.”
Bitcoin is seeing a strong bounce after four days of selling pressure that pushed prices down by nearly $2,000 dollar. According to Kitco’s aggregated charts, Bitcoin last traded at $6,539.90. At the same time, December gold futures last traded at $1,278.10 an ounce.
Milling-Stanley said that ultimately, Bitcoin is nothing but a new speculative trend that is probably going to end badly for investors. He equated investing in cryptocurrencies to going to a casino. He added that unlike gold, bitcoin will never been a store of value.
“I don’t want something in my portfolio that is 100 times more volatile than gold,” he said.
While Milling-Stanley has little love for cryptocurrencies, he said that he does see a future for the blockchain technology. This has the potential to revolutionize financial markets, he added.
“I am confident that there is a future for blockchain but I don’t believe its optimal use is for cryptocurrencies,” he said. “Bitcoin is used to pay for the most unpleasant criminal activity.”
As for gold prices, while the market is mired in a tight trading channel, Milling-Stanley said that he remains confident that it’s only a matter of time before prices break out to the upside.
He added that growing global uncertainty is starting to weigh on equity markets, which makes gold an attractive defensive investment. He added that he sees few drivers that will keep stock prices near record valuations.
“Gold continues to have a place as a solid portfolio diversify as it has no correlation with falling equity markets,” he said. “When we do see a breakout in gold I think it will be more likely to the upside and I am confident we will see prices back above $1,350 by the start of the new year.”
