Podcast Summary: BTC254 — Bitcoin & Macro Overview w/ Luke Gromen Q4 2025

Podcast: We Study Billionaires – The Investor’s Podcast Network
Episode: BTC254: Bitcoin & Macro Overview w/ Luke Gromen Q4 2025
Date: November 19, 2025
Host: Preston Pysh
Guest: Luke Gromen

Episode Overview

This episode features macro analyst Luke Gromen discussing the mounting financial stress inside the U.S. fiscal system, the global implications for monetary policy, and Bitcoin’s role as an early warning signal for liquidity crunches. The conversation traverses U.S. government fiscal math, repo market conditions, the role of hedge funds, shifts in oil supply and demand, geopolitics, AI financing, and housing. Luke and Preston also explore why Bitcoin and gold are behaving the way they are in this environment, the contradiction in stablecoin policy, and what signals to watch for a pivot in global liquidity trends.

Key Discussion Points & Insights

1. Current Macro Environment – Approaching Polycrisis

[01:22–04:05]

• The U.S. fiscal stance is precarious: “We’re running headlong toward a poly crisis of sorts, there’s a lot of things going on... The fiscal situation, for all of the hubbub about record receipts, we're still at interest plus entitlement payments at 96% of all-time high receipts” — Luke Gromen [01:37].
• The U.S. is rolling $550bn of T-bills per week (vs. $100bn in 2013).
• Market liquidity is tightening, as seen in the overnight funding markets and repo facility usage.
• Japan’s 10-year yields are at multi-year highs; yen is weakening even as yields rise, which is “emerging market type action.”

2. Treasury Market Mechanics & Risks

[04:05–08:24]

• The U.S. has shifted most funding to the short end due to lack of long-end demand.
• Hedge funds running “basis trades” have become the largest marginal buyers of mid- and long-dated Treasuries (owning ~$1.8tn).
• These trades are highly leveraged: “If there’s volatility anywhere, they have to de-gross, and so there will be $1.8tn of treasury selling if volatility picks up” — Luke Gromen [07:52].
• The system is at risk of a “printer default” (monetize deficits) if anything slips.

3. Liquidity Crunch & TGA (Treasury General Account) Dynamics

[08:25–14:35]

• Government shutdown and a swelling TGA (to ~$1tn) further tightened liquidity.
• The TGA isn’t likely to shrink dramatically due to the need for cash buffer against massive weekly T-bill rollovers.
• “It’s literally a snake eating its own tail... They have to keep repo down, long end calm, equities calm, can’t have vol anywhere or else it’ll be everywhere” — Luke Gromen [12:55].

4. Global and Geopolitical Pressure Points

[04:06, 06:42, 25:55–28:49]

• U.S. shale oil production is rolling over, but global demand is not—contradicting prior forecasts.
• Russia has “effectively beaten NATO in Ukraine,” which undermines the “US military backs the dollar” thesis.
• AI's explosive growth is creating bizarre financing needs, and “credit spreads on Oracle debt are starting to rise sharply” — Luke Gromen [06:45].
• Infrastructure bottlenecks: Hyperscalers (e.g., Nvidia) can’t get electricity hookups for years, challenging the viability of rapid AI expansion.

5. Housing & Interest Rate Policy

[18:28–25:50]

• The housing market remains frozen as consumers hold out for lower rates.
• Extended mortgage durations are masking affordability issues: “The whole reason they’re going to a 50-year mortgage is to mask the reality...” — Preston Pysh [24:22].
• Luke points out government policies are contradictory—cutting rates and “helping” homebuyers while increasing labor supply to suppress wages.

6. Bitcoin, Gold, and the ‘Debasement’ Trade

[28:49–34:29, 57:21–63:12]

• Bitcoin acts as a “canary in the coal mine” for liquidity: “Bitcoin's just your early source of liquidity...it warns you first when liquidity tightens” — Luke Gromen [29:19, 30:12].
• Gold is outperforming Bitcoin during liquidity stress because sovereigns “understand gold as the debasement trade” while Wall Street is still more comfortable with it than Bitcoin.
• When liquidity is extremely tight, the dollar typically outperforms everything, but Luke believes gold may outperform even the dollar in this cycle due to shifting perceptions post-2022 sanctions, military changes, and rare earth dependencies.

7. Stablecoin Contradictions & Policy Uncertainty

[34:29–41:37]

• The Fed’s Myron suggested “a global stablecoin glut” could replicate the positive dollar flows of the 1996–2004 “global savings glut,” but this directly contradicts other official calls for a weaker dollar and re-shoring industry.
• Estimated growth needed (to $3tn in stablecoins) is nowhere near current reality.
• The policy fits with attempts to “find a sucker at the card table” to buy treasuries at low yields despite inflation — Luke Gromen [50:03].

8. Potential Triggers & What to Watch

[45:00–56:35]

• Precedent: COVID liquidity injection showed how markets can rocket on monetary stimulus even absent real economy activity.
• In the current setup, only a sharp “whoosh down” (potentially in 1H 2026), or a political event (e.g., looming midterms) will force a decisive liquidity response.
• Weakest links: AI financing blowing up or a blowout in the repo/funding markets.
• Both Treasury and major AI players now compete for trillions in capital—intensifying the liquidity strain.

9. Historical and Structural Perspectives

[62:16–65:56]

• U.S. attempts to “go to wartime footing” bear little relation to the present: no social unity, instant financial transparency, no ready pool of idle workers.
• “We don't have the unity in this country that we had then...people haven’t been helped for 20 years, so they’re not about to help bail out the system this time” — Luke Gromen [65:56].

Notable Quotes & Memorable Moments

• On the systemic math not adding up:
  “The fiscal issues are—the math ain’t mathin’ anymore, and it hasn’t for a while, but it’s becoming obvious to everybody on Wall Street that the math just does not work.” — Preston Pysh [08:37]
• On hedge fund risks:
  “If there’s volatility anywhere, they have to de-gross, and so there will be $1.8tn of treasury selling if volatility picks up” — Luke Gromen [07:52]
• On U.S. policy contradictions:
  “Don’t mistake action for progress. The action we’re taking is we’re punching ourselves in the nuts, repeatedly, and mistaking that for progress.” — Luke Gromen [27:50]
• On gold as the new safe haven:
  “Treasuries are no longer as safe as gold after the 2022 sanctions...Wall Street are the last ones to get it. This is blasphemy: Treasury isn’t as safe as gold.” — Luke Gromen [58:01–58:32]
• On dollar vs. gold in a crisis:
  “Does gold outperform the dollar in that environment...I think it does.” — Luke Gromen [57:21–57:23]
• On Bitcoin’s role:
  “Bitcoin remains the best or the last functioning smoke alarm starting to cry shrilly and issue a very shrill warning of illiquidity.” — Luke Gromen [06:42]
• On market and political triggers:
  “We either gotta get a huge whoosh down or we gotta get something political...to force a liquidity response.” — Luke Gromen [47:29]
• On U.S.-China rivalry and rare earths:
  “If your neighbor said he wanted to kill you and then asked to borrow your shotgun, would you give it to him? And if you did, you deserve to get shot.” — Luke Gromen [59:33–60:28]

Timestamps for Key Segments

• Macro Overview and Polycrisis Setup – [01:22–04:05]
• Treasury Market Shifts, Hedge Fund Exposure – [04:05–08:24]
• Liquidity Crunch & TGA – [08:25–14:35]
• Discussion on U.S. Housing, 50-year Mortgages – [18:28–25:55]
• Bitcoin as Liquidity Canary, Gold as Safe Haven – [28:49–34:29, 57:21–63:12]
• Stablecoin Policy Contradictions – [34:29–41:37]
• Liquidity Pivot Signals and Triggers – [45:00–56:35]
• Long-term Structural & Geopolitical Risks – [62:16–65:56]

Summary Table: Macro Risks & Asset Signals

| Topic | Issue/Signal | Asset Implication | |-------------------|----------------------------------------------------------------------|-----------------------| | U.S. Fiscal Math | Interest + entitlements ≈ total receipts | Dollar pressure, risk | | Repo & TGA | Rolling $550bn/week T-bills, surge in TGA | Funding stress | | Hedge Funds | 37% of long-dated Treasuries held by levered funds | Volatility risk | | Oil Market | U.S. shale rolling over, demand rising | Inflation stress | | AI Funding | Skyrocketing credit needs, grid bottlenecks, rising spreads | Deflation + volatility| | Housing Market | Frozen housing activity, extended mortgages mask reality | Wealth effects weaken | | Bitcoin/Gold | Bitcoin: early liquidity warning; Gold: sovereign safe haven | Diversify reserves | | Stablecoins | Unclear policy, contradictory macro objectives | Unproven backstop | | Geopolitics | Ukraine outcome, U.S. military credibility, Chinese rare earths | Dollar reserve at risk|

Closing Takeaways

• The U.S. is attempting to square an impossible circle: keeping bond markets stable while fiscal math deteriorates and structural supply/demand imbalances worsen.
• Both policy and political calendar factors will play an outsized role in any liquidity interventions.
• Bitcoin serves as the distress beacon for tightening liquidity; gold is being adopted by sovereigns as the ultimate debasement hedge.
• Watch for political catalysts and default/volatility events in funding markets or AI to force a policy pivot.
• The sense of “unreality” in present policies is intensifying—a theme that echoes through all dialog in the episode.

Guest links:

• Luke Gromen’s research: fftt-llc.com
• X (Twitter): @LukeGromen