This article is also available in Spanish.
in interview With Mario Novel, Jan Van Eck, CEO of $118 billion global asset manager VanEck, provides an analysis of the potential path for Bitcoin, the US fiscal deficit, and broader financial markets. Contrary to some overly bullish forecasts, Van Eck provided a more conservative price target for Bitcoin for this rally.
“Our thesis is that Bitcoin will actually sustain the halving cycle, so we are looking at $150,000 to $180,000 in this cycle as a price target,” Van Eck stated. He rejected the idea that Bitcoin could reach $400,000 in the current cycle, suggesting that such a feat may be achieved in the next cycle. He added: “In the next session, I will reach my goal of half the value of gold, which is $400,000 plus depending on the price of gold.”
Discussing the US fiscal deficit, Van Eck described it as “the elephant in the room” and a major concern for markets. He added: “We are spending money that is completely unsustainable, and for any other country, it would be heading towards bankruptcy.”
Related reading
He outlined two schools of thought prevailing in Washington regarding fiscal policy. The first is the point of view of lobbyists, which asserts that it is impossible to cut spending significantly, resulting in a minimal slowdown in the growth of the budget deficit. The second approach is the “severe disruptor” approach, which calls for reducing government spending by about $500 billion.
Van Eck attributed the figure to Vivek Ramaswamy, co-head of the Department of Government Efficiency (DOGE), saying: “They can activate this because there are 1,200 programs that are no longer licensed but are still spending money, which means they can terminate them.” them by executive order.” He described this goal as “healthy” and “realistic,” although he acknowledged that it would not close the entire deficit, which reached $1.8 trillion last year.
Speaking about the market’s reaction to the election of President Trump, Van Eck found it strange that despite a clear election result, there was still uncertainty about fiscal policy. “We’ve had a sweep by one political party, but we don’t really know what their fiscal policy will be,” he noted.
He pointed out that the initial market reaction was negative for gold due to the possibility of government restructuring. “The initial reaction was negative for gold because the thought was, ‘Wow, maybe they will be able to restructure the government.’ You never bet against Elon, right?” He said.
Related reading
Van Eck also commented on geopolitical tensions, especially the situation in Ukraine and the approval to launch long-range missiles deep into Russian territory. While acknowledging that such events can impact markets, he warned, “The problem is that geopolitics is completely uninvestable. We never know what the next headline is, we don’t know if it will be bullish or bearish.” He advised that professional investors They often choose to “do nothing at all” in response to geopolitical uncertainties.
Bitcoin price catalysts
On the topic of institutional interest in Bitcoin and regulatory shifts, Van Eck emphasized that the regulatory environment plays a crucial role. “It really depends on the regulatory environment,” he added. He noted that while regions like Asia have seen regulators give the green light, the United States has been relatively calm. However, he noted a recent spike in interest: “Now, with the new system, suddenly the phone is ringing.”
Van Eck revealed his personal investment stance, saying: “That’s why I have a huge personal investment in Bitcoin and gold.” He expressed optimism about Bitcoin’s maturation process, likening it to a child growing up: “I would say it’s a bit like adolescence, and what makes it mature is the emergence of new groups of investors.” He noted that while individual investors have embraced Bitcoin ETFs, the wealth management industry has not yet fully participated.
Speaking about the relationship between Bitcoin and traditional markets, especially the Nasdaq, Van Eck admitted concern: “The thing that worried me the most (…) Bitcoin’s correlation with the Nasdaq was high.” He explained that this high correlation made Bitcoin less attractive to professional investors who were already overly exposed to big tech stocks. However, he remains hopeful that Bitcoin’s correlation will diminish: “We expect and predict that its correlation will return to zero, which it has been over the long term.”
At press time, Bitcoin was trading at $95,350.
Featured image created with DALL.E, a chart from TradingView.com
Comments are closed, but trackbacks and pingbacks are open.