Investment management firm Vaneck’s CEO, Jan van Eck, has predicted that both gold and bitcoin are expected to experience a bull cycle. According to van Eck, the Federal Reserve is “close to the end of their tightening.” The executive believes that “it could be a two-year cycle” due to concerns over the consequences of Federal Reserve tightening rolling through the commercial real estate market, banking and lending dynamics. Once the Federal Reserve starts easing, van Eck believes that “gold is really going to party.”
In an interview with CNBC, Van Eck revealed that “We are at the very beginnings of what could be a several-year cycle in gold, and I also put bitcoin in that category as well.” According to the CEO, the markets have already factored in the potential benefits of quantitative easing, and he believes that “all the speculation is out of both of those markets.”
Van Eck further explained that gold and bitcoin have been rewarded investors that have hedged their portfolios. So far, bitcoin has surged nearly 70% this year, making it the best-performing asset. According to Van Eck, “[bitcoin] has rewarded “the people that own bitcoin for that thesis of wanting a hedge in their portfolio.”
Last month, Pantera Capital, a blockchain investment firm, said that bitcoin is already experiencing the next bull market cycle. The Federal Reserve raised interest rates by 25 basis points last week, with some people expecting a rate cut soon, including billionaire Jeffrey Gundlach. However, Fed Chair Jerome Powell stated that rate cuts are not in the Fed’s base case. Schiff warns that the Federal Reserve may be already exercising quantitative easing whether they’ve admitted it yet.
Van Eck’s Vaneck firm currently has $69 billion in assets under management. Van Eck says that “finally, as a gold investor, you’ve been rewarded over the last couple of weeks. Weakness in the banking system and gold rallied. That’s why you own gold.”
The prediction of a multi-year cycle in gold and bitcoin will be welcome news for investors and crypto enthusiasts who have struggled to find a sense of direction in the market since the 2017 crypto boom. The news comes as the global economy has become increasingly uncertain, with the US-China trade war and Brexit negotiations still ongoing. European Central Bank President Mario Draghi is also advocating monetary easing measures to stimulate the Eurozone economy.
Overall, Van Eck’s prediction enters a debate that is divided between safe havens and high risk. While bitcoin is perceived as a high-risk investment, a recent report by Delphi reported that bitcoin held values comparable to gold as a hedge against the market risk. In any case, Van Eck has been accurate in the past with his predictions on the gold market. His bold forecast of multi-year cycles in both gold and bitcoin may signify a sea-change of attitude towards the innovative cryptocurrency.