In interview along with Mario Nawfal, Jan van Eck, CEO of $118 billion global asset manager VanEck, presented an analysis of the potential trajectory of Bitcoin, the US fiscal deficit and broader financial markets. Contrary to some hyper-bullish predictions, van Eck provided a more conservative price target for Bitcoin for this bull market.

Van Eck stated: “Our thesis is actually that Bitcoin will persist in a halving cycle, so we use an amount between $150,000 and $180,000 in this cycle as a price target.” He rejected the notion that Bitcoin could reach $400,000 in the current cycle, suggesting that such a milestone could be achieved in the next cycle. “In the next cycle, I will reach my goal of half the gold value, which is $400,000 plus depending on the gold price,” he added.

Discussing the US budget deficit, van Eck described it as an “elephant in the room” posing a solemn problem for markets. “We are spending money which is simply unsustainable and for any other country the country would be heading towards bankruptcy,” he noted.

He outlined the two dominant schools of thought in Washington regarding fiscal policy. The first is the perspective of lobbyists, who claim that it is impossible to significantly cut spending while causing a minimal slowdown in the growth of the budget deficit. The second is the “extreme disruption” approach, advocating $500 billion in government spending cuts.

Van Eck attributed this number to Vivek Ramaswamy, co-head of the Department of Government Effectiveness (DOGE), stating: “They can achieve this because there are 1,200 programs that are no longer authorized but are still spending money, which means they can be terminated them an executive order.” He described the goal as “sound” and “realistic,” although acknowledging it would not close the entire deficit, which was $1.8 trillion last year.

Referring to the market reaction to the election of President Trump, van Eck found it strange that despite the clear election result, uncertainty about fiscal policy persists. “We had control by one political party, but we don’t really know what its fiscal policy will be,” he noted.

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 idea was, wow, maybe they can restructure the government. Never bet on Elon, right? he said.

Van Eck also referred to geopolitical tensions, especially the situation in Ukraine and the consent to strike with long-range missiles deep into Russian territory. While acknowledging that such events could impact markets, he warned: “The problem is that geopolitical issues are completely uninvestable. We never know what the next headline will be and we don’t know if it will be bullish or bearish. He advised that professional investors often choose to do “absolutely nothing” in response to geopolitical uncertainty.

Bitcoin price catalysts

Referring to institutional interest in Bitcoin and regulatory changes, van Eck emphasized that the regulatory environment plays a key role. “It really depends on the regulatory environment,” he said. He stressed that while in regions such as Asia regulators have given the green featherlight, things have been relatively peaceful in the US. But he noted a recent surge in interest: “Now, with the new regime, suddenly the phone is ringing.”

Van Eck revealed his personal investment stance, stating: “This is 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 a teenager, and the maturation is happening through the emergence of new sets of investors.” He noted that while retail investors have embraced Bitcoin ETFs, the wealth management industry has yet to fully engage.

Referring to the correlation between Bitcoin and customary markets, particularly the NASDAQ, van Eck admitted to having concerns: “What worried me most was […] Bitcoin’s correlation with NASDAQ was high.” He explained that this high correlation makes Bitcoin less attractive to professional investors who were already overexposed to large-cap technology stocks. However, it remains to be hoped that Bitcoin’s correlation will decrease: “We believe and expect that its correlation will return to zero, which has been the case in the long term.”

At the time of publication, the price of BTC was $95,350.

Featured image created with DALL.E, chart from TradingView.com