The Wolf Of All Streets - Bitcoin Will Reach $8 Trillion Market Cap | Jan Van Eck

Episode Date: June 2, 2024

Jan van Eck, the CEO of VanEck, an ETF Fund Manager, talks about Bitcoin, Gold, and the massive problem that will push the price of Bitcoin in the next few years. This is an interview I did with Jan at Paris Blockchain Week 2024. Enjoy! Jan van Eck: https://x.com/janvaneck3 ►► Sponsored by iTrust Capital Invest in Bitcoin, Crypto Assets & Gold with Your IRA Using iTrust Capital. 👉 https://bit.ly/itrust-scott ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/   ►►OKX SIGN UP FOR AN OKX TRADING ACCOUNT THEN DEPOSIT & TRADE TO UNLOCK MYSTERY BOX REWARDS OF UP TO $60,000!  👉 https://www.okx.com/join/SCOTTMELKER  ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. USE CODE ‘25OFF’ FOR 25% OFF WHEN VISITING MY LINK.  👉 https://tradingalpha.io/?via=scottmelker     ►►NGRAVE This is the coldest hardware wallet in the world and the only one that I personally use. 👉https://www.ngrave.io/?sca_ref=4531319.pgXuTYJlYd  ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets   Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #Gold  Timestamps: 0:00 Intro 2:30 Trust 5:18 iTrustCapital 6:16 Gold rally & fiscal problems 2025 11:20 Gold & Bitcoin 15:30 European regulation 17:30 Fixing the regulatory problem 18:40 Why you should buy Bitcoin The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

So I'm quite sure that everyone here has heard the name VanEck at this point. If they hadn't before, they've certainly heard it of late because of the Bitcoin spot ETFs that have been approved. But perhaps you can quickly give us some background on yourself and on VanEck. Yeah, just a little bit. Thanks. Thanks, Scott. I'm excited to be here and thank you for anyone who at 540 in the afternoon is hanging out in a pitch black dark room. You're heroes of mine. So just VanEck's background. I think the most important thing is just how do we think about investing? And I think it's a very traditional European, Dutch, English perspective,

which is to look at what's going on around the world and to say, are there economic, political, or technical trends that are going to affect your portfolio? Either a way to make money or risks to avoid. Are there economic, political, or technical trends that are going to affect your portfolio? Either a way to make money or risks to avoid. Americans, why do you, that probably seems natural to almost everyone in this room, but Americans think, oh, I don't even need to worry about that. I always want to be invested in equities. I always want to be invested in fixed income.

I don't have anything to worry about. And generally that's true. America's been a great economy. But we see, even in my career, asset classes emerge like emerging markets. And the event for VanEck, my father started the first gold fund in 1968. And just to spend a little bit on that,

because it's really, he was a historian, but used it functionally to try to describe how do you think about the future? And we're going to talk about the future here. But the future can be crazy different. We are built as defective investors because we have recency bias. So we just think, oh, the market's done this over the last 12 months. It's probably going to do that. And that's just not true. So as a trick to kind of help about different, think about different scenarios in the future,

we kind of like look at history. It's interesting that your father, obviously, as you said, had the first gold fund. And here you are now with a Bitcoin fund, which I think leads us to the topic. Why are we here? So I think maybe we should get some give some context as to what here is for our purposes. Well, I'm excited. This is the center of crypto as far as I'm concerned globally right now. Europe is the largest retail market where the regulators are friendly, I'll say it, to crypto. And the other reason, I think, is why do we care about moving money around?

This is a whole conference really about money, and there's other things in life that are more fun arguably than that. And I think it's because our existing financial institutions reflect what's happened to at least Americans' distrust or increasing concern about other institutions in our society. And you probably all know this. This is just one of the charts that you can maybe see. And it's just, this is a collection of religious, Congress, military.

Probably the most shocking lack of trust though is when it comes to media. And I think this is the most shocking lack of trust though is when it comes to media, and I think this is the most relevant to financial markets in a way. So the line that is at the highest at the end of this is people that have little or no trust in the media, in the mainstream media defined as TV media and newspapers. And so that's kind of incredible, right? So they just don't believe anything that they're told anymore. And so anyway, I think that's reflected in the

desire of the people to come to a conference like this because they want to have some of their wealth outside of the banking system, which is systemically fragile. It obviously shows a trend. Roughly 5% in the 1970s of people trusted mass media. Now, as I look at it, it's around 39% have no trust. No trust. In mass media. And we know institutions, as you said, there's a lack of trust as well. How much of that has to do with fiscal policy, monetary policy, the government's handling of the economy, right? Because I think that that's probably a key focus for a lot of people and where they lack that trust and what brings us obviously here. Yeah. I mean, if I had to put it in a phrase, it's the fragility of banks. In Europe, it's hard to understand because the government's support, I'll call it the national champion banks,

and some people think that they should be consolidated. But, you know, no bank, if all its customers went to the ATM, could meet their customers' demands because of the structure of banks. So they require governments to bail them out. And last last year even almost to the day right, Silicon Valley Bank, they not only you know almost had allowed banks to fail, they literally put two banks out of business because they were invested in crypto technology. So it's a very fragile, it's a very fragile system and that's why we're here I think. Crypto investors in the United States face some major challenges. One of them is that there's almost no way to get exposure to the asset class inside of your traditional investment vehicles. The other thing is the taxes. They are absolutely atrocious. What if I told you there was a way to

solve both of these problems? Well, there is. And it's with a self-directed IRA from iTrust Capital. Guys, not only can you open a new self-directed IRA and fund it with the limits each year But you can actually convert over from your 401k your Roth IRA any other IRA that you already have and you can do that tax-free just transferring over the balance and then you can go to cash buy as Much Bitcoin than you want and not pay taxes when you sell it You absolutely have to try this if you are in the United States. Use the link down below. It's bit.ly slash itrust-scott. That's B-I-T dot L-Y slash I-T-R-U-S-T dash S-C-O-T-T. You have to try this now. I agree. And then there's the fact that we're adding a trillion

dollars in the United States to our debt every hundred days Which is absolutely unsustainable to anyone with a brain, but they'll tell you obviously that our economy is strong Jobs are strong inflation is coming down wages are rising, but people don't feel that and people see numbers With spending and they have to scratch their head and say, what's going on here? Yeah, I mean, listen, that's the base case for a store of value asset like gold or Bitcoin. But I've got a particular thesis about 2025 that I'd like to share. Just a couple more charts and then I promise no more charts. So why is gold rallying so strongly now is the question and in

major newspapers I've heard that asked and not answered and so I've got this I've got this theory that the markets are starting to price in a big fiscal problem in the United States in 2025. So let me unpack that. Why 2025? In the United States we generally only solve our big policy problems the year after a presidential election, because then it's safe for Republicans to talk to Democrats. Fact one. Fact two, Social Security in the U.S. is going bankrupt in 2033. I mean, it's only accelerating, actually, and coming closer. So we have two years where we can solve this problem, 2025 or 2029.

You don't solve a 80 year old problem in three years. So 2029 is gonna be too late. So I think that's why the markets are looking at 2025, okay. And they look at the two presidential candidates who are the biggest spenders in US history, and they're going like, I'm not sure this problem is gonna be solved, give me a little gold, And they look at the two presidential candidates who are the biggest spenders in U.S. history. And they're going like, I'm not sure this problem is going to be solved. Give me a little gold.

Give me a little bit more Bitcoin. And then you might say, well, Jan, that's obvious. But really, things are so great. Unemployment is low. Are there any other indicators? They're just going to flip two quick ones. I'm not going to show you. So this is my favorite U.S. credit default swaps going back to the time of the financial crisis. So you can see how they spiked,

you know, let's call it 12 years ago, stayed high and then came down. But look at how they spiked in 2023 because of the budget impact. And they've stayed elevated. And we could talk about this for an hour. But that to me is a signal where the markets are worried about this 2025 problem, as I call it. And then my last one is just the green line. You don't have to read it, what it is. It's emerging market local currency debt performance against US government debt. And like, who would have thought that for the last three straight years, and that's the span of this chart, that actually Brazil, South Africa, all the EM countries

combined, are outperforming US government? Our fiscal deficits are 6.5% in the US. They're about 5.5% in France, 2% in Germany, and the Dutch come in at less than 1%. You're an eternal optimist, clearly. As you said, we have two candidates who are the biggest spenders in history. One of them is obviously going to win and be the president presiding over that 2025 problem that we have coming. How do you think that it's solved, or do you think that it's solvable at all many pessimists would

say runaway train debt spiral impossible to fix this problem so again going back to history I just wanted what are the possible scenarios and what are the odds so don't say like Russia will never invade Ukraine we don't know pull out all the scenarios so I'm just saying listen if 10 to 20 percent the markets price in a fiscal problem in the US, what would you want to own? And are those the right odds? So yeah, maybe your odds are 50%. Okay, then adjust your portfolio and become a Bitcoin maxi. So I'm just asking the question. And I like to identify, there's a lot of charts on Wall Street, right? I'm sure you see this all the time.

I like to try to pick out. That's why I wanted to show you my favorite charts, because I think we just have to watch this problem and maybe it disappears. But it's interesting because investment advisors in the United States, not only do they not generally allocate to Bitcoin, but they don't allocate to anything outside of stocks and bonds. So you still see the 60-40 portfolio, which we know is the worst performing in history in 2022 that we've ever seen. They're not even looking at gold as a hard asset. They're not allocating to anything outside of stocks and bonds, which are, as we know,

are massively exposed to this problem. There are outflows out of gold bullion ETFs in the United States this year, even as it hits all-time highs and has risen rather dramatically. This year it's up, what, 14%? Okay, it's not Bitcoin's 70%, but still. Is that because of Bitcoin ETFs? A lot of people say that the money is flowing out of gold spot ETFs, gold ETFs into Bitcoin spot ETFs. Okay, I wasn't going to do this. Do it. No, but since you asked, let me see. I have to find the chart. Okay.

So a clever colleague of mine looked at Google searches of gold against Bitcoin. And I guess in the theater, it's probably hard to see this. But the blue line is gold and the red line is searches for Bitcoin. So this is basically Google's way of sort of consolidating investor interest in the two assets. And yeah, what you see is Bitcoin is dominating gold. The interest in gold geographically is in Asia, very much in Asia. We don't know China because they don't use Google. But we also know that the reason that gold is primarily spiking is

because those central banks are buying gold. Yes, very much. And so does that explain we have this sort of strange stranger things upside down world we're living in where stocks go up, the dollar goes up, gold goes up, Bitcoin goes up. There's supposed to be some inverse correlations there. Why are we here? Because investors outside the innate states increasingly don't want to be tied into SWIFT and the U.S. financial system and the political control that comes with it. We didn't discuss this in advance, but do you think that central banks are or could be in the future adding Bitcoin the same way that they're adding gold? We hope so. I don't know what

you think about El Salvador's actions, but my colleague Matt Siegel, who writes great research on our website, says, look, it's going to be frontier central banks first. You know, Saudi's mining Bitcoin, so you can, you know, how do you categorize that exactly? But they're definitely, you know, accumulating crypto-related assets, Bitcoin-related assets. And you talked about how people are seeing this problem coming and they're trying to get ahead of it by buying things like gold and Bitcoin.

Do you think that the majority who are buying Bitcoin are doing it for that reason? Or do you think that it's still a largely speculator-driven market? I think it's, listen, you know, people say, oh, is Bitcoin digital gold? And unfortunately, early in trends, you can't prove it because the trend hasn't proven out for a long period of time. But it's hard for me to look at gold hitting all-time highs whenever it was 21 and Bitcoin same year. And this year, same thing, both assets. They don't correlate on a daily basis. I can't show you some, you some very fancy math around this.

But to me, the narrative has always been there since 2016, 2017. It's just different generations reach for different tools. So when do you think Bitcoin reaches that level of adoption across all investor classes viewing it in that way? Because I think you're correct. It's probably primarily millennials, maybe Gen Xers, the boomers haven't quite yet come to Bitcoin, but now we do have an investable way

for them to get access in a manner that they're familiar, obviously with the ETFs. But do you think that there will become that general awareness that Bitcoin is an asset that you have to have in your portfolio, even with a small percentage of the population? I think it'll take, you know, I say it'll eventually become at least half the market cap of gold. So I think that takes another five or 10 years. I mean, the TradFly

clients are still very confused by Bitcoin and they don't want to talk about it, but their clients make them talk about it. So we have a long ways to go. And also, buying activity is not helpful, right? They want to buy it at the top and then it's going to go to zero at the bottom. And so they're bad at allocating. How do you educate them to become better at allocating? Is it to literally tell them, listen, your dollar cost averaging into 1% of a client portfolio, that's it, be done, don't be worried about price, and check it every six months? I think that's the solution, and that's proven to be the way to do it,

and that's what I tell people. I think emotionally it's hard for people to do that. So in the United States, there are a lot of firms, obviously in Europe as well, that allocate people's portfolios for them. And so my hope is those allocators will be open-minded enough to consider gold or Bitcoin at the right time in the cycle and disciplined to take advantage of those trends for their clients.

Because I kind of give up that the end clients will get it. I want to quickly circle back to something you said right at the beginning, why we're here, because Europe has a forward-thinking regulator and is a much more friendly environment. I don't think a lot of people view it that way. I think a lot of people still look at other jurisdictions or playing regulatory arbitrage, Dubai, Singapore, even Hong Kong now. I was actually surprised to view Europe as friendly per se? Is it just that there's clarity? The first thing you want is a regulator that you can talk to and say, you know, can we do this or not? Not, you know, yeah, visit enforcement and getting subpoenas. So we have an operation, VanEck is about 100 billion in assets. We have about approaching 10 billion in ETFs here in Europe. We have 12 ETNs in

Europe that track one token or multiple tokens. So we've had a Bitcoin ETN for three years. We just added staking to our Ethereum ETN. So the US is so far behind. And I was asking my colleague earlier today, they don't interact with regulators too often. I mean, they have to follow the rules. In the US, like we talked to the regular, I mean, not in a voluntary way, but we had to talk to them to get approval for all our early ETFs. But we're getting subpoenas or inquiries or sweeps once a quarter. And we talked to them very regularly. So and they're incredibly hostile to crypto. I mean, I don't're incredibly hostile to to crypto i mean i don't think that's news to anyone but i don't of my conversations today i don't think people

appreciated how hostile they are i mean again they put two banks out of business 12 months ago for doing nothing illegal it just didn't provide them the line of credit they needed to stay in business even with barney frank a favorite Frank, a famous former legislator, on the board of one of those banks. Yeah, and they put one of them out of business on a Sunday. Yeah, that's it. It really is incredible.

You talk about fixing the economic problem next year. What fixes the regulatory problem? Change in presidents. I mean, who knows if Trump gets elected elected, what Trump too will look like. But I've met with some of his officials, you know, Crypto Daddy and Brian Brooks and all these people. And, you know, they have a very they're very pro crypto. So it would be a completely different regulatory regime. But I think right now, like, don't I just tend tend to tell people don't spend time in the United States, focus on Europe, focus on other parts where you can actually do stuff and build stuff. Is there hope with if we don't have regime change that we could at least

see new people at the top of the SEC or a more friendly regulator with the same president? You know, Biden cut a deal with Elizabeth Warren. She really drives a lot of our financial regulation. So if she's going to be calling the shots, no. The anti-crypto army seems very unpopular. So at least we have that, I think, going for us. I know we're coming near to time. I want to circle back, obviously, to the why are we here, maybe to wrap it up. Final thoughts on why it's important for people to buy bitcoin whether it's through one of these financialized products or to buy it spot and hold it yourself and uh how we get more people to do that yeah i mean there's a okay there's a narrative

i talked about with respect to bitcoin but there's so many other things happening um in crypto that that vanek is hoping to get involved with. Besides, I would call wrapping all these tokens in rather traditional products, we're getting engaged. We have a Web3 initiative that was sort of an entrepreneurial thing that we seeded out of VanEck. We took over the New York Stock Exchange last Friday with the Pudgy Penguins, some good stuff on Twitter. And then we're going to be managing the assets for one of the newer stablecoins

that's just announced that they're coming to market. So that's exactly what BlackRock is doing with Circle. We think there's room for competition. The stablecoin market itself is super exciting. There's $12 trillion, trillion dollars of volume on stable coins today. I think if that grows five times, the world will be upside down, right? I don't think people realize how rapidly this technology actually will work and if they adapt it and adopt it and what will happen to payment systems and banks. Yeah, the numbers on stablecoins are astounding,

and the attribution, how quickly they're being adopted is crazy. What's interesting is it's usually USDT on Tron, which I don't think people necessarily realize, but that is solving. That, to me, has been the killer app for crypto outside of Bitcoin as an asset. Yeah, but what I try to underline is the growth potential

and just think about that. That alone, forgetting all the other exciting things that people are working on at this conference, that alone will have a huge, you know, political and financial impacts, I think.

Well, I can't wait to see what VanEck works on and produces and releases next. It's really been an honor. Thank you so much. Well, Scott, thanks wait to see what VanEck works on and produces and releases next. It's really been an honor. Thank you so much. Well, Scott, thanks for having me. Thanks again to the heroes who stuck out for... Heroes.

You're all heroes. You hear that? This late afternoon. Every one of you wear capes. And if you want to stay in touch, I'm on Twitter, I'm on LinkedIn. So I'd love to continue the dialogue. Absolutely. Thank you so much.

Okay, man. Great. Thank you so much.