12 June 2024

At the Money: Gold, Bitcoin & Other Thematic Investments

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Macro Thematic Investing Framework

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Insights & moments

The myth-busts, hot takes, explainers, and tools worth keeping.

Myth Buster· 1

Myth Buster06:24

Most Crypto Assets Should Be Judged as Software

Unlike Bitcoin, other crypto protocols are presented as open-source software investments. Their value depends on whether users pay for the service, whether usage grows, and whether a freely copied protocol can sustain an economic advantage.

Bitcoin and other crypto assets require different valuation lenses
Open-source code can be copied immediately
Paying users provide stronger evidence than token narratives
Only a limited number of protocols show meaningful paid activity
Current user counts leave substantial adoption uncertainty

“the rest of this stuff is software investing.”
Jan van Eck · 06:51

“Are people paying to use this software?”
Jan van Eck · 07:10

#crypto#altcoins#software#valuation

Hot Take· 2

Hot Take04:57

Bitcoin Is Becoming the Internet's Version of Gold

Van Eck treats Bitcoin differently from the rest of crypto, describing it as the native scarce asset produced by the internet era. Its broad ownership and network use make displacement unlikely, while its long-term destination may be a comparatively boring role alongside gold.

Bitcoin is framed as a monetary asset rather than software
Network popularity creates a barrier to being leapfrogged
Younger investors may prefer Bitcoin to physical gold
Maturity could make Bitcoin an ordinary alternative asset

“I just look at bitcoin as its own gold. For the Internet gold, it's Internet gold.”
Jan van Eck · 05:28

“Then in five years Bitcoin's going to be boring.”
Jan van Eck · 06:11

#bitcoin#gold#crypto#network-effects

Hot Take08:39

Stablecoin Volume Is Approaching Payment-Network Scale

Stablecoins provide a concrete crypto use case by moving dollar-linked tokens through blockchain networks. Van Eck cites annual trading velocity comparable to Visa and argues that further growth could make phone-based stablecoin payments a major financial theme.

Stablecoins track the value of the dollar
Reported annual trading velocity reached ten trillion dollars
That activity was compared with the Visa network
Fivefold growth would materially change the payments landscape
Consumer protection remains weaker than with major card networks

“the velocity of trading of stable coins last year was ten trillion dollars, the same as the Visa network.”
Jan van Eck · 08:45

“What if people constantly now on your phone start using stable coins as opposed to dollars.”
Jan van Eck · 09:04

#stablecoins#payments#defi#visa

Explainer· 3

Explainer01:03

What Thematic Investing Actually Covers

Thematic investing targets a narrowly defined part of the market rather than the market as a whole. A theme can be expressed through a group of stocks, an industry, a country, or another focused asset set.

Themes are specialized market exposures
A theme may span stocks, industries, countries, or assets
Focused exposure distinguishes a theme from broad diversification

“It could be a group of stocks, it could be a group of it could be a country, it could be an industry, a very…”
Jan van Eck · 01:11

#thematic-investing#portfolio#markets

Explainer03:32

Why Central Banks Are Buying Gold Again

The seizure of Russian reserves after the invasion of Ukraine altered how some governments assess dollar-denominated reserve assets. China, India, and several Eastern European central banks have accumulated gold as protection against sanctions, asset seizure, and monetary risk.

Russian reserve seizures changed sovereign risk calculations
Some central banks are diversifying away from US government bonds
China and India are notable buyers
High US deficits add an inflation-and-dollar dimension to the thesis

“the reaction has been other countries are worried that the United States does the same thing, so they've been buying gold in their foreign cent…”
Jan van Eck · 03:50

“Because of the US government spending at seven percent of GDP.”
Jan van Eck · 04:42

#gold#central-banks#reserves#geopolitics

Explainer07:54

Predictable Fees Made Blockchains More Usable for Business

Volatile transaction fees made blockchain applications impractical because businesses could not forecast operating costs. Lower-cost chains and layer-two systems improved price predictability in 2023, making blockchain infrastructure more plausible for real commercial use.

Unpredictable fees deter business adoption
Businesses need stable transaction economics
Low-fee chains offer one route to predictability
Layer-two systems offer another route
Technical progress does not guarantee demand

“No real business is going to use that. Right, that was fixed in twenty twenty three”
Jan van Eck · 08:16

“this database software solution now became price predictable.”
Jan van Eck · 08:31

#blockchain#fees#business#layer-two

Story· 1

Story01:18

The Gold Fund Launched Before Gold Could Rise

Van Eck's father started a gold fund in 1968 even though the metal was still fixed against the dollar and offered no nominal upside. The investment anticipated mounting government spending, an eventual break from the gold standard, and gold's historical role as an inflation hedge.

The fund launched while gold remained fixed to the dollar
Federal social and war spending strengthened the inflation thesis
Ending dollar convertibility unlocked gold-price appreciation
Gold-company shares amplified the move through operating leverage

“Even though gold had been fixed against the dollar for the entirety of US history.”
Jan van Eck · 01:58

“in history, gold has been the hedge, it's been the way to play inflation.”
Jan van Eck · 02:49

#gold#inflation#history#macro

Takeaway· 1

Takeaway09:19

Crypto's Upside Still Collides With Consumer-Protection Gaps

Decentralized payments could reduce dependence on banks and card networks, but users currently surrender protections they often take for granted. Credit-card fraud coverage and password recovery remain meaningful advantages over self-custodied crypto, making consumer safety a prerequisite for broader adoption.

Card fees pay for protections as well as payment processing
Fraud liability is limited for many card users
Crypto users can bear the full cost of theft or lost credentials
Financial disintermediation remains the potential long-term upside
Security and recovery are unresolved adoption barriers

“because if it gets stolen, they cover me for everything over fifty bucks.”
Barry Ritholtz · 09:25

“there's still some growing pains on the crypto side, but eventually disintermediating the big banks and the big financial players, that's the potential upside for…”
Barry Ritholtz · 09:36

#crypto#consumer-protection#payments#defi