Gold And Bitcoin Are Bullish At This Point: Luke Gromen

May 31, 2023

Luke Gromen, a macro trader, talks about a key moment that could send both gold and Bitcoin (BTC) soaring.

Gromen told Blockworks Macro in a recent interview that he thinks Bitcoin and gold will win “either way in the end.”

The investment expert says that Bitcoin and gold are likely to go up when the market figures out that the US government is getting ready to print more dollars to pay for its national debt.

“If the Fed (Federal Reserve) raises rates too much, they will bankrupt the United States government, and there’s nothing more bullish for gold and for Bitcoin than the moment when markets go, ‘Oh my God, they can’t raise rates more because the only way to pay the interest is if the Fed prints it.’

Obviously, the US government is not going to go nominally bankrupt. The Federal Reserve will print the difference or the US government… But that moment when the market goes, ‘Oh my God, inflation hasn’t come down. They’ve raised rates a bunch. They need to raise them more, but from here the only way to make the interest payments are by printing the money.”

Gromen says that if the Fed keeps its tight money policies, gold and Bitcoin are likely to lose value in the short run. But he says that the growing national debt will finally force the Fed to change its position, which would be good for both assets that can be used to store value.

“However, if the Fed does not print the money, then as paradoxically given the dollar’s incumbent role as (the) reserve currency and the dollar borrowings out there, the US government is going to crowd out global dollar markets…

And the dollar will go up, and that can put some pressure on gold and Bitcoin in the short run, but ultimately, from there, the distance point is, ‘Okay, the Fed does not print it enough, and the US government heads towards default,’ and you will get to a moment where markets go, ‘Oh gosh, they could actually default.’

And that ain’t bad for gold and Bitcoin in my view.”