Macro investor Luke Gromen says that in the coming years, Bitcoin (BTC) and risk assets will benefit from a souring sentiment in US long-term bonds.
In a new video update, Gromen says that due to inflationary pressures, capital will likely rotate from the bond market into stocks, gold and Bitcoin.
[adinserter block="1"]The investor says that because of these pressures, the iShares 20+ Year Treasury Bond exchange-traded fund (TLT) is signaling weakness against risk assets and inflation hedges.
“There’s a $130 trillion global bond market that will need to run into a $65 trillion stock market which I think is happening. [There’s a] $14 trillion gold market and a $1.3 trillion Bitcoin market for safety from that inflation. And you’re seeing that in the charts.
If you look at the S&P 500 over the TLT – the long bond ETF – it looks like a hockey stick. Nasdaq over TLT: hockey stick. Industrials over TLT: hockey stick. Gold over TLT, all together now: hockey stick. Bitcoin over TLT: hockey stick but very volatile hockey stick.
So my view is in the secular inflation that we are in the early days of, you’ll see stocks up in dollar terms [but] down in gold and Bitcoin terms. Basically Argentina with US characteristics.”
Due to heavy inflation, the Argentinian stock market index (MERVAL) has skyrocketed over 3,779% in the last twenty years, averaging more than 188% returns each year.
However, in dollar terms, the Argentinian peso has essentially gone to zero in the same timeframe.
At time of writing, Bitcoin is trading at $64,689.
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