Jan van Eck, the CEO of mutual fund pioneer VanEck, says there’s much to learn from history: “Jay Powell thinks he’s in 1973, but the stockmarket still thinks it’s in 2021”.
One of the many pearls of wisdom Jan van Eck’s pioneering father, John, passed on to him was to listen to what people say because more often than not, they mean it.
“Wage inflation is what matters and services inflation and wage inflation are super high and they haven’t come down really at all.” That evening on Wall Street, stockmarkets duly plunged, a sign that traders are perhaps paying closer attention to central bank rhetoric.Van Eck’s reference to the 1970s is not without rich context. His father John was one of the first people to invest globally through mutual funds.
He says bitcoin absolutely siphoned demand from gold, but crypto is facing yet another test, this time a crisis of confidence after the collapse ofVan Eck remains a believer in bitcoin and blockchain technology despite a year that has severely dented faith in cryptocurrencies. “The way it’s used in finance is evolving,” he says as he lists three proof points as to why he remains convinced that blockchain and cryptocurrencies will endure.
And the third reason, he says, is a vast swathe of the world’s population “live in a country that doesn’t have a stable and open financial system”.There is no denying FTX has inflicted financial pain and reputational wounds on crypto evangelists, even if they were on the periphery or were philosophically opposed to Bankman-Fried’s efforts to bring about regulation.Van Eck’s takeaway is that the FTX saga highlights the powerful role of trading firms and market makers.
“It’s not clear the total return over a cycle will top public equity markets, and there’s a lot of conflict of interest between integrated venture capital firms.“If you have a fund for early stage, middle stage and late stage private companies, and they are buying from each other, there’s a conflict.”
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