Macro guru Luke Gromen says the rise of Bitcoin (BTC) treasury companies is a logical response to the US government’s continued debasement of the dollar.

In a new video update on YouTube, Gromen says investors are currently reacting to a large-scale financial bubble that has been “kicked upstairs” through the stock, banking, and housing markets before finally being pushed into the Treasury market.

Gromen notes that the only way for the US government to maintain the bubble – rather than face a default or a severe depression to get its fiscal situation back in order – is to devalue its debt via inflation.

Now that such a reality is becoming clear to market participants, Gromen says it makes perfect sense that many corporate entities are creating shareholder value by taking advantage of BTC’s strict supply cap.

“In my opinion, it’s critical to remember how we got here. We had an equity bubble, it popped, we kicked the problem upstairs to the banking sector and the housing sector, it created a housing bubble, it popped, we kicked the problem upstairs to the Treasury market by backstopping virtually everything… 

Now the credit risk is at the Treasury market level, except, Treasuries have no credit risk. The government can always just print the money to make interest payments and avoid default. So there’s no credit risk in Treasuries, only inflation risk. 

So in my opinion, what we’re seeing in Bitcoin treasury companies in particular is logical, in light of this primrose path we’ve followed over the past 25 years. As more and more people begin to realize the only way out of this is severe devaluation of US debt, of US sovereign debt, of Western sovereign debt.

In that case, I would expect credit spreads to remain relatively low, because all else equal, I’d rather own an Apple bond or a Microsoft bond than a US Treasury bond.”

At time of writing, the US government’s national debt is about $37 trillion.

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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Macro strategist Luke Gromen warns that the US dollar will keep losing value amid a ballooning $36.60 trillion national debt.

In a new YouTube update, Gromen says the US, with its record-level national debt, is now forced to choose between sacrificing the bond market or letting the dollar fall to maintain financial and economic stability.

According to the macro expert, the US government will ultimately resort to debasing the dollar by printing more money to manage its debt, rather than allowing Treasury yields to soar in an effort to attract investors.

“What we’re seeing in these bond markets, US and more importantly for the moment Japan and the UK, is a choice. You got to sacrifice your currency or you to sacrifice your bond market. And our view, really the base underpinning of our view why gold and Bitcoin are trading where they are trading, is they always choose to sacrifice the currency…

Because if they sacrifice the bond market and let rates just go up and up and up, given their debt levels, they ultimately end up sacrificing both: the currency and the bond market because higher rates drive receipts down and interest up and that means interest quickly goes above your receipts.

And when that happens, that drives essentially hyperinflation of the currency. Either they can’t pay the bonds and the bonds back the currency or more likely, they print the money just to pay the interest and drive a version of hyperinflation.

So they always choose to sacrifice the currency over sacrificing the bond market when debt levels are high as they are and that’s why, because sacrificing the bond market only buys them a little bit of time, and they ultimately end up sacrificing both.”
 

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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Macro strategist Luke Gromen unpacks how developments in the energy market could directly impact Bitcoin (BTC).

In a new thread on the social media platform X, Gromen tells his 340,800 followers that he thinks gold and Bitcoin are poised to surge if energy prices spike.

“1. Whenever physical [gold] is revalued to a big multiple of oil, energy prices in fiat will skyrocket, sending gold far higher on fiat.

2. When energy prices in fiat skyrocket, the price of BTC will also skyrocket in fiat.

And the stock-to-flow ratio of BTC is way higher than gold.” 

When asked about the connection between oil and BTC, the macro expert explains that surging energy prices fuel inflation, which in turn puts pressure on the bond market.

“Because the bond market will need to be capped with printed money to prevent the inflation driven by a rise in energy prices from collapsing it…

Rising energy prices beyond a point will break bonds.

Once that happens, either money will have to be printed to cap yields to maintain government solvency, or sovereign debt will nominally get restructured.

Assets with no counterparties should outperform (gold, BTC).”

When inflation is on the up and up, bond investors demand higher yields (returns) to make up for the loss in purchasing power. Bonds locked into lower yields typically witness a drop in value as investors rush out of assets that offer little to no real returns, triggering a bond market collapse. Gromen thinks that the Fed will be forced to buy bonds with printed money to prevent a collapse, creating favorable conditions for Bitcoin and gold.

Gromen also notes that at the most fundamental level, Bitcoin is a product of the energy market as miners rely on massive amounts of electricity to mine BTC.

“Electricity used to support BTC and its price is very real, enough to power much of the US continent.”

At time of writing, Bitcoin is worth $106,401.

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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China sold off billions of dollars worth of US Treasuries between February and March, according to new government data.

An update from the Treasury Department shows China’s US Treasury holdings dropped $18.9 billion in one month, while most other countries increased their holdings.

The data also shows that the UK has overtaken China and is now the second-biggest foreign holder of USTs in the world.

Japan remains the biggest holder of USTs in the world, currently holding $1.13 trillion, down from $1.16 trillion a year prior.

Macro investor Luke Gromen warns that the countries buying more USTs won’t be able to simultaneously buy more American-manufactured goods, further hurting America’s trade deficit that President Trump has promised to address.

Says Gromen,

“Foreign UST holdings rose $133 billion Mar vs. Feb.

UK, Caymans, and Canada were $86 billion of that $133 billion; China sold $19 billion.

UK surpassed China as the 2nd biggest US foreign creditor for 1st time ever in March.

Cayman Islands (pop. ~73,000) is now the fourth biggest US foreign creditor at $455 billion…

How are they going to buy both USTs and more goods from America going forward?”

Analysts reportedly told Reuters that Chinese holdings of USTs have been in a downward trajectory since 2018, even though foreign holdings of Treasuries surged to an all-time high of $9.05 trillion in March.

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Investor Luke Gromen says that Bitcoin (BTC) may catch a boost from gold if the precious metal usurps US Treasuries to become the preferred settlement asset.

In a new video update, Gromen says that if the White House truly wants to reshore American manufacturing as stated, the US will have to learn to stop or at least slow down the exporting of the dollar and Treasuries.

To achieve the current administration’s goal, the macro guru says the White House could allow gold to become the primary settlement asset instead of the dollar or Treasuries.

A settlement asset is a financial instrument used by central banks and governments to settle a trade or monetary obligation.

Gromen also says that if gold becomes the new settlement asset, investors might start to see Bitcoin as a reliable alternative.

Explains Gromen,

“We can export Treasuries and financial assets, or we can make stuff, but if we want to make stuff, that’s the end of the post-1971 US dollar reserve status structure. And it’s an underappreciated point.

The way you get around it is you shift the settlement asset away from Treasuries to a neutral reserve asset like gold. I think that process has been started.

I thought it was extraordinarily interesting and potentially important that Trump did not put tariffs on gold. He put tariffs on everything else in the world, including an island full of penguins, apparently, but not gold, which tells me that’s where we want capital to go, and that’ll weaken the dollar which, guess what, if gold goes up a bunch, it’ll strengthen the dollar system because it’l be more gold-backed and you’re going to weaken the dollar. That’s how you split the baby around Triffin’s Dilemma and a neutral reserve asset.

I think Bitcoin probably benefits over time from that, too.”

The Triffin’s Dilemma is a concept established by economist Robert Triffin that notes a paradox between the need of the United States to run trade deficits to supply the world with enough USD, while keeping inflation and confidence in the currency at reasonable levels.

At time if writing, Bitcoin is trading for $84,603.

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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Macro investor Luke Gromen says that the White House may have caused a massive change in the way that Bitcoin (BTC) trades.

In a new interview with Natalie Brunell on the Coin Stories podcast, Gromen calls attention to the America First Investment Policy, a memo released by the Trump Administration in February that aims to make the US foreign investment policies more cautious and conscious of national security.

Gromen, the founder of the macroeconomic research firm Forest for the Trees (FFTT), says that the memo essentially directs China to “take your money and go home, we don’t want it here anymore.”

With all of the foreign capital invested in US markets, Gromen says the Nasdaq index will likely suffer capital outflows while Bitcoin – as a neutral global asset essentially exempt from tariffs or political agendas – will shine, breaking the correlation between the two assets.

“That, I think will ultimately be a catalyst to the separation of Bitcoin and Nasdaq, and that, I think, is starting to drive Nasdaq down – it has a long way to go because multiples are high – and in the short run, traders control the flows…

Bitcoin is levered Nasdaq, I get it; it’s a high-beta Nasdaq, in the short run. If you back up to a five-year or ten-year chart, you can see very clearly these periods where Bitcoin has massively outperformed Nasdaq, but they still tend to go directionally similarly, when Bitcoin’s up Nasdaq’s up and vice versa…

The America First Investment Policy memo, I think, will start to break that correlation because I think right now in the short run, that correlation is holding, [but] at some point I think capital flow is going to see Bitcoin for what it is which is a neutral reserve asset linked to energy, uncontrollable by any govenment and I think it’ll start siphoning some flows off from Nasdaq as America continues to say, ‘Listen, you want to invest in some factories here? Great, otherwise, get out.’ 

And that’s a lot of capital that’s got to get out, and we’re seeing gold benefit already. I think what we’re seeing in gold is a precursor to what we’ll see in Bitcoin.”

At time of writing, Bitcoin is worth $83,233.

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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