Bitcoin’s latest rally has State Street Global Advisors’ chief gold strategist, George Milling-Stanley, raising an eyebrow. Investors, he says, are falling for a dangerous illusion, mistaking Bitcoin’s meteoric rise for stability.

According to Milling-Stanley, Bitcoin doesn’t even come close to matching gold’s time-tested safety, and the current frenzy is all about returns, not reliability.

“Bitcoin, pure and simple, it’s a return play, and I think that people have been jumping onto the return plays,” he said. This critique landed during the 20th-anniversary celebrations of SPDR Gold Shares ETF (GLD), the world’s largest physically backed gold ETF.

It’s up more than 30% this year, and Milling-Stanley didn’t miss the opportunity to remind everyone of gold’s staying power. “Gold was $450 an ounce 20 years ago. It’s now five times that. If you look at a five-times price, then gold should be somewhere over $100,000 in twenty years’ time,” he said.

Gold is still delivering. Futures for the precious metal hit $2,712.20 on Friday, the highest since November 5 and just 3% below its record high from late October. But while gold enjoyed its best weekly performance since March 2023, Bitcoin’s recent surge stole the spotlight, smashing records and pushing boundaries.

Bitcoin breaks away from gold

Gold and Bitcoin are heading in different directions. For years, investors treated the two as safe-haven assets, but recent trends are splitting the pair apart. Bitcoin has surged since the November 5 election, riding high on political optimism and increasing adoption. Meanwhile, gold’s strong year is showing cracks, with profit-taking starting to chip away at its momentum.

Milling-Stanley believes Bitcoin’s rise is no accident. He accused crypto promoters of trying to steal gold’s shine, even pointing to the use of mining terminology as a strategic ploy. He said:

“This is why Bitcoin promoters called it mining. There’s no mining involved. This is a computer operation, pure and simple. But they called it mining because they wanted to seem like gold — maybe take some of the aura away from the gold.”

Because yes, that makes sense. His skepticism didn’t end there. While he’s confident gold will remain valuable, even he admitted, “I have no idea what’s going to happen over the next 20 years except it’s going to be a fun ride.”

Washington gets involved

Bitcoin, however, seems unstoppable. Republican Senator Cynthia Lummis from Wyoming is pitching an ambitious plan to create a strategic Bitcoin reserve.

Her proposal? Sell some of the Federal Reserve’s gold holdings and use the proceeds to buy 1 million Bitcoin, roughly 5% of the crypto’s entire supply. The cost? About $90 billion at current prices.

“We already have the financial assets in the form of gold certificates to convert to Bitcoin,” Lummis said, insisting that the move would leave the U.S. balance sheet largely unaffected. Her plan also includes holding the Bitcoin for at least 20 years, banking on its value to rise significantly.

The idea is that Bitcoin’s future appreciation could help pay down the national debt. Lummis’ bill would expand on “crypto president” Donald Trump’s existing idea to establish a Bitcoin reserve. Right now, the U.S. government holds around 200,000 Bitcoin, seized in criminal cases and asset forfeitures.

Under her plan, the stash would grow exponentially, potentially making the U.S. the biggest Bitcoin holder in the world. But it’s not all smooth sailing. Her proposal, which currently lacks co-sponsors, faces an uphill battle in Congress. The crypto prediction market Polymarket gives her plan a 31% chance of passing.

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