Emily Walker
In a recent interview conducted by Natalie Brunell, Luke Gromen, a prominent macroeconomic analyst and founder of FFTT LLC, shared his thoughts on how former President Donald Trump’s actions could potentially sway Bitcoin’s price. The dialogue focused on Trump’s proposal to build a Bitcoin reserve and his assertion that Bitcoin is akin to oil.
Bitcoin as ‘The New Oil’
When discussing Trump’s ambition to accumulate a million Bitcoins in the coming years and the implications this could have globally, Gromen drew on historical examples and economic strategies. He recalled Trump’s statement from the Bitcoin 2024 conference, where Trump declared, “Bitcoin is the new oil.” This remark intrigued Gromen and led him to delve into the deeper strategic significance rather than viewing it merely as a tactic for garnering votes.
Gromen cited a comment Trump made in August regarding using Bitcoin to settle US debt, stating it struck him as peculiar. He began contemplating whether Bitcoin could indeed be comparable to oil, suggesting that Bitcoin might experience inflation similar to oil prices.
He referenced a notable increase in oil prices during the 1970s, mentioning, “In late ’73 to early ’74, oil prices surged by 400%.” Gromen recalled comments made by the former Saudi Oil Minister, Ahmed Zaki Yamani, during a CNN interview.
“In a 2010 CNN International interview, Yamani recounted a meeting in late ’73 where Henry Kissinger indicated that oil prices would increase dramatically. This came to fruition, as noted by Yamani,” Gromen explained.
According to Gromen, the U.S. was strategically manipulating the oil market to support deficits through the recycling of petrodollars, which ultimately led to the abandonment of the gold standard in favor of an oil-backed standard. He remarked, “[This] effectively addressed the U.S. fiscal challenges post-Vietnam and transitioned the economy onto an oil standard.”
Gromen proposed that a similar tactic might be employed for Bitcoin now. He speculated on Bitcoin’s inflation potentially acting like oil’s historical price spikes, suggesting that this could enhance the value of stablecoins that, in turn, would increase demand for Treasury bills, benefiting the U.S. economy by channeling global capital into these investments.
In his analysis, Gromen referenced recent insights from the Treasury Borrowing Advisory Committee (TBAC), which discussed the U.S. fiscal situation and the role of digital assets in financing. He perceived this as a signal that major banks are recommending that the Treasury explore how digital asset markets could alleviate the fiscal and debt challenges faced by the U.S.
Additionally, Gromen brought up Paul Ryan’s op-ed in The Wall Street Journal, where the former Speaker suggested that stablecoins could be a solution for U.S. debt issues. The alignment in views from such influential voices led Gromen to consider a unified approach that integrates Bitcoin and stablecoins to strengthen economic growth.
“We need a way to support the dollar while simultaneously enhancing the dollar’s framework,” stated Gromen. By inflating Bitcoin’s worth, there could be an uptick in demand for stablecoins and T-bills, drawing more dollars into the U.S. financial landscape, thereby tackling the debt situation and stimulating economic activity.
Gromen emphasized that his perspective is speculative and derived from recent developments in the field. “It’s a nascent viewpoint and not firmly established,” he acknowledged. Nonetheless, he finds the confluence of Treasury findings, political discourse, and historical contexts persuasive. “I genuinely believe they are contemplating this possibility,” he concluded.
As of the latest update, Bitcoin is valued at $96,751.