"His core thesis is the " debasement trade." In simple terms, when a country carries too much debt, it can make that burden easier to manage by allowing inflation to run and letting the currency lose purchasing power over time. This dynamic pushes some investors toward assets that are harder to create in unlimited supply, such as gold and, for many years, Bitcoin."
"As of December 2025, Gromen has not abandoned the debasement view. What has changed, however, is his short-term outlook on Bitcoin ( BTC). On the RiskReversal podcast, he said BTC looks weak enough that a move toward the $40,000 range in 2026 is possible. He also described Bitcoin as a position that can be scaled down as conditions deteriorate and said gold and some equities currently express the debasement theme better than BTC."
Luke Gromen maintains that governments will rely on inflation and weaker currencies to make heavy debt more manageable. He calls this the debasement trade and sees demand for scarce assets like gold and Bitcoin. Gromen is more cautious on Bitcoin short-term, noting potential movement toward the $40,000 range in 2026 and advising position scaling as conditions deteriorate. He finds gold and certain equities currently better express the debasement theme. He identifies practical warning signs: Bitcoin lagging gold, breaks below key moving averages, and growing discussion of quantum risk affecting sentiment. The recommended process is tracking the BTC-to-gold ratio, a simple trend filter, and ETF flows.
Read at Cointelegraph
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