State Street Global Advisors, which operates the world's largest gold exchange-traded fund (ETF), has opposed the idea that cryptocurrencies can compete with gold as a long-term strategic asset.
The firm's chief gold strategist, George Milling-Stanley, told CNBC's “ETF Edge” program that the high volatility of cryptocurrencies is not suitable for investors who want to protect their wealth over time.
“Volatility does not support the claims of cryptocurrencies to be a long-term strategic asset as a competitor to gold,” he said.
State Street Global Advisors is sponsoring SPDR Gold Shares, the world's largest physically-backed gold ETF with over $57 billion in assets as of last week.
Milling-Stanley argued that thanks to its 6,000-year history as a monetary asset, gold has a proven track record of providing a hedge against inflation, stock market weakness and the depreciation of the dollar:
“Gold provides a hedge against inflation. Gold provides a hedge against potential weakness in the stock market. Gold provides a hedge against potential weakness in the dollar.
In my view, historically, the promise of gold to investors has greatly helped boost the returns of a properly balanced portfolio.”
*Not investment advice.