Luke Gromen: Bitcoin Could Become a US Reserve Asset

Renowned macroeconomic expert Luke Gromen believes the United States must seriously consider Bitcoin (BTC) as a neutral reserve asset to address growing national security and economic challenges.

In a recent interview with Bitcoin advocate Robert Breedlove, Gromen argues that the US is at a critical juncture following a perceived defeat in Ukraine by Russia, which he claims has exposed vulnerabilities in the country’s defense and economic systems.

The Shift in Game Theory

Gromen contends that the US dollar system, which led to the outsourcing of manufacturing and the decline of domestic industry, has undermined the nation’s ability to produce vital defense equipment. However, the national defense apparatus now sees an opportunity to use Bitcoin to revitalize industries and stabilize the economy:

“The game theory has changed: for national political stability, for bringing back the middle and working class, and for defense base re-establishment. All of these things are pointing to a neutral reserve asset… Bitcoin.”

Signs of a Bitcoin-Backed Treasury Market

Gromen highlights key signals that the US could leverage Bitcoin to support its Treasury market and address deficits:

1. Treasury’s interest in stablecoins to finance T-bills.
2. Former House Speaker Paul Ryan’s proposal to use stablecoins to create demand for Treasury bills.
3. Reports of Trump describing Bitcoin as “the new oil”, hinting at a strategic Bitcoin reserve.

Drawing parallels to the oil crisis of 1973, Gromen suggests Bitcoin could experience a similar surge:

“What that oil price did by moving up that way was it effectively made oil big enough to back the dollar, to back the US deficits.”

Bitcoin as a Strategic Reserve Asset

According to Gromen, elevating Bitcoin as a neutral reserve asset would allow the US to:

• Rebuild domestic industries essential for national defense.
• Finance deficits without impoverishing Americans.
• Address political stability and economic inflation while compensating citizens with rising Bitcoin valuations.

He emphasizes the Treasury’s focus on crypto assets and their growing role in purchasing T-bills:

“The Treasury Borrowing Advisory Committee report shows a linear relationship: here’s the market cap of crypto, here’s the market cap of stablecoins, here’s how many T-bills stablecoins have bought.”

Reframing Bitcoin as an Opportunity

Gromen argues that Bitcoin must rise faster to expand the US’s balance sheet capacity, enabling the country to finance domestic reinflation while protecting its citizens’ wealth:

“Bitcoin isn’t a threat that is rising. It needs to go up faster so that we have more balance sheet capacity. As we reinflate to re-shore all of this stuff… Bitcoin will compensate your people to keep them whole on a real basis while that happens.”

Luke Gromen’s insights mark a profound shift in the conversation surrounding Bitcoin’s role in the global economy. As the US grapples with national security challenges and economic deficits, Bitcoin may emerge as a neutral reserve asset, offering a strategic solution to revitalize industries, stabilize the Treasury market, and protect citizens from inflation.