Luke Gromen's 2025 Bitcoin Exit: Why a Macro Analyst Changed His Sequence Judgment

In late November 2025, macro analyst Luke Gromen made a significant decision that sent ripples through the crypto community: he divested the majority of his Bitcoin holdings. This wasn’t a complete abandonment of his long-term bullish stance—Luke Gromen still believes in Bitcoin’s ultimate potential—but rather a tactical repositioning based on shifting macro conditions. In his final 2025 video, he provided the most comprehensive explanation yet for this move, revealing a thought process that extends far beyond Bitcoin itself.

The narrative underlying Luke Gromen’s decision points to something fundamental: the global macro environment is entering a new phase. For three decades, the system has rewarded financial assets, Wall Street profits, and asset holders while squeezing manufacturing capacity, industrial workers, and productive economies. But as geopolitical tensions sharpen and supply chain security becomes paramount, government priorities are shifting. We’re transitioning from a “finance-first” world to one where geopolitical realism and real economic foundations matter again.

The Misunderstanding About Bitcoin in Deflation

Luke Gromen had long held Bitcoin as a “liquidity smoke detector”—the asset that signals when the financial system’s loosening is tightening. This thesis held up remarkably well through multiple market cycles. However, he now acknowledges a critical error in his original framework: he misjudged Bitcoin’s behavior in a deflationary environment.

His original thesis assumed Bitcoin would function as a neutral reserve asset during deflation. Reality proved otherwise. When genuine deflation arrives, Bitcoin doesn’t behave like digital gold; instead, it trades like a high-beta technology stock—meaning it gets hit hard when the market rotates away from risk assets.

To understand why, consider the structure of our highly leveraged global economy. Every asset can be understood within a “capital structure” framework: when liquidity is abundant and asset prices are rising, the equity layer at the bottom of the capital pyramid performs best. When deflation hits, the equity layer gets crushed first and hardest. This is exactly what happened to CDOs and CLOs in 2008. Luke Gromen increasingly believes that in today’s system, Bitcoin occupies precisely this equity layer position—making it vulnerable when deflationary pressures intensify.

How AI and Robotics Created Real Deflation

But it wasn’t just standard deflationary cycles that shifted Luke Gromen’s judgment. What truly forced a reassessment was the emergence of AI and robotics as a novel deflationary force with three distinctive characteristics:

First, the deflation stems from technological efficiency gains, not demand destruction. This is qualitatively different from traditional economic downturns. Second, these technologies are already impacting employment patterns, particularly hitting young workers hard. Third, the spread is remarkably fast—faster than policy makers typically respond.

This creates a paradox: in this environment, any policy less than “nuclear-level money printing” effectively acts as tightening. And in tightening environments, what gets pressured first? The equity layer—which is where Bitcoin sits. This structural insight became the core reason Luke Gromen reduced his Bitcoin position and turned cautious on near-term Bitcoin performance.

Importantly, he’s not denying Bitcoin’s long-term case. Rather, he believes the policy response that would ultimately benefit Bitcoin may not arrive as quickly as he previously anticipated. The central banks have been slower to react than he expected, and he no longer believes they’ll pivot rapidly.

The Case for Silver: Structure Over Emotion

If Luke Gromen’s caution on Bitcoin is tactical timing, his preference for silver reflects structural conviction. Silver isn’t an emotional position but a supply-demand reality: industrial demand for silver continues climbing, while the supply side has almost zero capacity to expand quickly. Even if prices rise significantly, producers can’t spin up production rapidly to meet demand—unless the world enters a deep recession.

But here’s the recursive logic: if we do hit true recession-level deflation, policy makers will be forced back into the “crisis-to-money-printing” cycle much faster than the current gradual squeeze allows. From this lens, silver’s logic is simpler and more direct than Bitcoin’s. It benefits from both the near-term squeeze (supply constraints meeting rising demand) and the eventual pivot (real crisis forcing monetary expansion).

The Bigger Picture: From Finance-First to Realpolitik

What Luke Gromen wanted to emphasize in his final 2025 message transcends asset allocation. The deeper shift he’s observing is civilizational: the world is moving away from the finance-first paradigm that dominated the last 30 years.

During this finance-centric era, bond markets won, Wall Street won, and financial asset holders prospered—while manufacturing capacity, industrial workers, and real production got squeezed. Now, with national competition intensifying, supply chain security becoming non-negotiable, and industrial capacity recognized as strategic infrastructure, government policy objectives are being forced to change.

This doesn’t herald some beautiful low-rate, weak-dollar utopia. Instead, it’s likely to be messier: more unstable, more friction-laden, less elegant, but also more grounded in material reality. It’s the return of geopolitical realism as a primary organizing principle.

Sequence Matters: Knowing When to Step Back

The core of Luke Gromen’s message is ultimately about sequence and timing. Yes, he still believes deflation will eventually trigger a crisis that forces massive monetary response. Yes, he still respects Bitcoin’s long-term significance and is preparing for that eventual turning point. But his revised view is that this sequence will unfold more slowly than previously expected.

Before the policy truly pivots, before “nuclear-level responses” materialize, he prefers to step aside from the most vulnerable layer of the capital structure—where Bitcoin currently sits—and wait for prices to reflect economic reality more fully. He may be “calculating too finely,” he admits, and he could be wrong. But this represents his most honest assessment given current conditions.

This touches on a principle often overlooked in financial discourse: long-term investing doesn’t require perpetual market participation. Genuine long-term thinking sometimes means recognizing when to step back, maintain conviction, and avoid letting short-term noise force you into irreversible decisions at the wrong moment. Luke Gromen’s 2025 decision exemplifies this discipline—not capitulation, but strategic patience.