Exploring Trump’s Potential Impact on Bitcoin Prices
In a recent conversation with Natalie Brunell, Luke Gromen, a distinguished macroeconomic analyst and the founder of FFTT LLC, shared his perspective on how former President Donald Trump might influence Bitcoin’s market value. The discussion revolved around Trump’s campaign pledge to build a strategic Bitcoin reserve and his intriguing analogy of Bitcoin to oil.
Bitcoin: The Emerging ‘New Oil’
When quizzed about Trump’s ambition to amass up to a million Bitcoins in the coming years and its potential ramifications on the global stage, Gromen delved into historical analogies and strategic economic tactics. He reminisced about Trump’s remarks at the Bitcoin 2024 conference, where the former president boldly declared, “Bitcoin is the new oil.” This statement captured Gromen’s curiosity, leading him to investigate further strategic implications beyond mere campaign rhetoric.
Advertisement Banner
Gromen reflected on another of Trump’s comments from August, where he proposed using Bitcoin to “pay off US debt.” “It was a peculiar statement,” the economist noted. “I began pondering whether Bitcoin could indeed be seen as the new oil, poised for inflation like oil once was.”
He pointed to a significant historical event from the early 1970s: “If we rewind to the late ’73 and early ’74 period, oil prices surged by 400% between October ’73 and April ’74,” Gromen observed, citing an interview with former Saudi Oil Minister Ahmed Zaki Yamani.
He further elaborated, “In a 2010 interview on CNN International, Yamani recounted a meeting of the Bilderberg Group on a Swedish island in October ’73. Henry Kissinger made it clear that oil prices would escalate by 400%. And indeed, it transpired just as predicted. These insights were shared by the former Saudi Oil Minister on CNN.”
According to Gromen, the United States was expanding “the oil market to support US deficits” by channeling petrodollars into US debt, effectively abolishing the gold standard and establishing an oil-based economic framework. “This strategy effectively resolved the US fiscal challenges post-Vietnam War and after we abandoned the gold standard,” Gromen explained.
Gromen proposed that a similar approach could be applied to Bitcoin in contemporary times. “I began to speculate if Bitcoin might become the new oil—possibly inflated like oil to boost stablecoins, which could then purchase significantly more Treasury bills,” he conveyed. By dramatically elevating Bitcoin’s price, the US could potentially attract global capital into Treasury bills via stablecoins, thereby addressing its pressing debt concerns.
He pointed to a recent report by the Treasury Borrowing Advisory Committee (TBAC), which included two supplements: one highlighting the unsustainable US fiscal trajectory and the other discussing “Digital Assets and the Treasury Market.” Gromen interpreted this as “leading banks advising the Treasury on how digital asset markets might help resolve the acute US fiscal and debt issues.”
The Role of Stablecoins in Addressing Debt
Paul Ryan, the former Speaker of the House, also contributed to the discourse. Gromen referenced Ryan’s op-ed in The Wall Street Journal, where Ryan proposed that “stablecoins could assist the US in addressing its debt challenges.” This convergence of views among influential figures prompted Gromen to consider a coordinated strategy involving Bitcoin and stablecoins to fortify the US economy.
“We require a mechanism to weaken the dollar while reinforcing the dollar system,” Gromen asserted. By inflating Bitcoin’s value, the US could potentially “increase stablecoins, escalate stablecoin demand for Treasury bills,” and attract international dollars into the US financial landscape. This could simultaneously resolve the debt issue and invigorate the economy.
Gromen acknowledged that his views are speculative and based on current observations. “It’s a relatively novel perspective; I don’t hold it too firmly,” he admitted. Nevertheless, he finds the intersection of Treasury reports, political commentary, and historical parallels intriguing. “I genuinely believe they’re considering this approach,” he concluded.
As of the latest update, Bitcoin was trading at $96,751.
“`
