Veteran investor Luke Gromen says he sees Bitcoin (BTC) rising over the coming months on the back of a favorable macroeconomic backdrop.
In a new interview with crypto journalist Natalie Brunell, Gromen highlights the US government’s nearly $35 trillion debt.
With the national debt sitting at record-high levels, the macro expert says there’s nothing the Fed can do to stop the resurgence of inflation, which will ultimately drive investors to seek shelter in store-of-value assets like Bitcoin to preserve their wealth.
“I’m super bullish Bitcoin for the next six to 12 months at least, tactically and strategically because whether the Fed hikes or whether the Fed cuts, doesn’t matter. In my opinion, inflation and fiscal deficits are going higher.
The only way that it doesn’t happen is if the dollar is weakened. Then, fiscal deficits will actually trend lower.
So my choices are: higher rates [and] more inflation, lower rates [and] more inflation or deficits down with a weaker dollar [means] more inflation [and] more debasement.
I think it sets up really, really well for Bitcoin and critically the fundamentals are there, but when you look at positioning, there’s still a lot of skepticism on Bitcoin, and there’s still $6 trillion-plus sitting in money market funds. There’s still a lot of concern, there’s still a lot of belief that the Fed’s, ‘Oh inflation is picking back up, the Fed is going to come in and smack inflation back down.’
No, no, no, no, no. They can try and you could get a pullback… If we go from the Fed going to cut twice this year to the Fed’s going to hike this year, you probably going to get a sell-off in Bitcoin and industrial stocks, stocks, maybe even gold… for like a week or two.
And then there’s going to be this recognition of, ‘Oh god the Treasury market is dysfunctioning, we can’t have that.’ So that’s going to start the discussion and ultimately 6% rates are going to be more inflationary on a lag than 5.25% because there’s $35 trillion in debt and it’s rising as a percent of GDP now and Fed rate hikes will make it rise faster as a percent of GDP.
So I’m super bullish Bitcoin because I’ve got fundamentals: they hike, it’s inflation; they don’t hike, it’s inflationary; they don’t hike, it’s inflationary; they cut, it’s inflationary.
If they want to keep the wheels on the cart, they’ve got to weaken the dollar or continue to weaken the dollar. All of which is good for Bitcoin.”
At time of writing, Bitcoin is trading for $64,637.
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