VanEck CEO Jan van Eck says both gold and Bitcoin (BTC) are likely to take off on huge multi-year bull cycles.
In a new interview with CNBC, van Eck is forecasting that economic conditions are likely to increase the value of gold and Bitcoin which many investors view as a hedge against depreciating currencies.
He says that US banking troubles have already led to increasing value for both assets. And he says that the Federal Reserve will likely have to stop raising interest rates, which they have done to draw down inflation, due to the adverse impacts on the economy.
“I think we’re at the very beginnings of what could be a several-year cycle and gold and I also put Bitcoin in that category as well. I mean you have to love that finally as a gold investor, you’ve been rewarded over the last couple of weeks. Weakness in the banking system and gold rally. That’s why you own gold.
The reason I think it could be a two-year cycle is because I think that the Fed is close to the end of its tightening. The market is worried now about the consequences. And it could take a year or more for those consequences to roll through the commercial real estate market, the banking and lending dynamics. Maybe we have a shallow recession.”
The CEO of VanEck, which has $69 billion in assets under management, says gold and Bitcoin are increasing in value for the same reasons. Investors are turning to these assets to have a hedge in their portfolios.
“I think all the speculation is out of both of those markets. There’s obviously no leverage in the Bitcoin market with all the regulatory crackdown and all the crises that we’ve had over the last year or so. So it’s up like 70% on the year, best-performing asset, again, rewarding the people that own Bitcoin for that thesis of wanting a hedge in their portfolios.”
He predicts that once the Fed stops raising interest rates and starts to lower them, Bitcoin’s value will only soar as more liquidity enters the markets.
“At some point, the Fed will start this easing cycle and you will want this in your portfolio. Short term there might be pullbacks and it might be a sideways year for this asset as well. But I do think when the cycle turns, it could be pretty exciting.”
Bitcoin is trading for $28,578, up 3% in the past 24 hours.
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