In an interview with Mario Nawfal, Jan van Eck, CEO of VanEck, a $118 billion global asset manager, analyzed the potential trend of Bitcoin, the US fiscal deficit, and the broader financial markets. Contrary to some overly bullish predictions, van Eck set a more conservative price target for Bitcoin in this bull run.
“Our thesis is really that Bitcoin will keep halving cycles, so we think the price target for this cycle is $150,000 to $180,000,” Van Eck said. He refuted claims that Bitcoin could reach $400,000 in the current cycle, suggesting that this milestone could be achieved in the next cycle. “In the next cycle, it will reach my target of half the value of gold, so $400,000 plus, depending on the price of gold,” he added.
Speaking of the U.S. fiscal deficit, Van Eck called it the "elephant in the room" and a major issue for the market. "The amount of money we are spending is completely unsustainable, and for any other country, they would go bankrupt," he commented.
He outlined two dominant schools of thought in Washington on fiscal policy. The first is the lobbyist view, which argues that it is impossible to cut spending deeply enough to slow the growth of the budget deficit. The second is the "extreme disruptor" view, which advocates cutting government spending by $500 billion.
“They were able to achieve that goal because there were 1,200 programs that were no longer authorized but were still spending money, which meant they could terminate them by executive order,” said Van Eck, who attributed the figure to Vivek Ramaswamy, co-director of the Department of Government Efficiency (DOGE). He described the target as “healthy” and “realistic,” although he acknowledged it would not make up the entirety of last year’s $1.8 trillion deficit.
Speaking of the market’s reaction to Trump’s presidency, Van Eck found it odd that fiscal policy remained uncertain despite the election outcome being clear. “One party won a big victory, but we don’t really know what their fiscal policy is going to be,” he observed.
He noted that the initial market reaction was negative for gold due to the possibility of a government restructuring. “The initial reaction was negative for gold because the thought was, wow, maybe they can restructure the government. Never bet against Muscat, right?” he said.
Van Eck also commented on geopolitical tensions, particularly the situation in Ukraine and the approval of the launch of long-range missiles deep into Russian territory. While he acknowledged that such events could affect the market, he warned that "the problem is that geopolitics is completely uninvestable. We never know what the next headline will be, and whether it will be bullish or bearish." He advised professional investors to "do nothing" when dealing with geopolitical uncertainty.
Catalysts for Bitcoin Price
When talking about institutional interest in Bitcoin and regulatory changes, Van Eck stressed that the regulatory environment plays a crucial role. "It really depends on the regulatory environment," he said. He pointed out that while regulators in regions such as Asia have given the green light, the United States has been relatively quiet. However, he pointed out that there has been an increase in interest recently: "Now, with the new regime, the phone is suddenly ringing."
Van Eck revealed his personal investment stance, saying: "This is why I have a lot of personal investment in Bitcoin and gold." He expressed optimism about Bitcoin's maturation process, comparing it to a growing child: "I would say it's a bit like a teenager, and what makes it mature is the entry of new investors." He pointed out that while individual investors have accepted Bitcoin ETFs, the wealth management industry has not yet fully participated.
Speaking of Bitcoin’s correlation with traditional markets, especially the Nasdaq, Van Eck admitted that he has concerns about it: “What worries me most is… the high correlation between Bitcoin and the Nasdaq.” He explained that this high correlation makes Bitcoin less attractive to professional investors who are already overinvested in large-cap tech stocks. However, he still hopes that Bitcoin’s correlation will decrease: “I support and expect its correlation to return to zero, which has been the case for a long time.”
At press time, BTC is trading at $95,350.
