Key conclusions

• Luke Gromen still believes that governments will rely on inflation and weaker currencies to deal with enormous debts.

• In the brief term, he is more cautious on Bitcoin and sees a possible move towards the $40,000 range in 2026.

• His main warning signs are lagging Bitcoin gold, trend damage to key moving averages, and “quantum risk” headlines weighing on sentiment.

• The solution is process-based: track BTC to gold ratio, elementary trend filter and ETF flows instead of copying someone else’s trades.

Who is Łukasz Gromen?

Luke Gromen is a global macro analyst. In early 2014, he founded FFTT (Forest For The Trees) and publishes macro research for investors, including his Tree Rings product.

His main thesis is “trading in devaluation.” Simply put, if a country has too much debt, it can make that burden more manageable by allowing inflation to rise and allowing the currency to lose purchasing power over time. This animated is pushing some investors toward assets that are harder to produce with an unlimited supply, such as gold and, for many years, Bitcoin.

As of December 2025, Gromen has not abandoned his view of humiliation. However, his short-term view on Bitcoin (BTC) has changed.

On Risk Reversal Podcastsaid BTC looks tender enough that a move towards the $40,000 range in 2026 is possible. He also described Bitcoin as a stock that could be shortened as conditions deteriorate, and said gold and some stocks currently articulate the depreciation theme better than BTC.

He points to several practical warning signs: Bitcoin is lagging gold, breaking below key moving averages, and discussion about quantum risk is growing.

Understanding “humiliation” as Gromen uses the term

When Gromen uses the term “demotion,” he means this: If a government takes on too much debt, it can make the burden lighter over time, allowing inflation to rise and the currency to lose value. The nominal debt remains the same, but realistically it allows for smaller purchases.

This result counts. In a devaluation environment, people often look for assets that are harder to “print”, such as gold and sometimes Bitcoin, because they are seen as better at preserving purchasing power than cash.

In brief, Gromen’s basic view is that devaluation will trickle down to Bitcoin.

Time is also a key issue for Gromen. He doesn’t see it as a quick deal with a clear end date. Instead, he sees it as a long process in which backtracking may occur, which does not mean that the broader thesis will be completed.

Did you know? “Humiliation” started as a literal trick. In age-old and medieval times, rulers reduced the precious metal content of coins to escalate the money supply, either by cutting off petite amounts from the edges of the coins or by melting them and adding cheaper metals. The coin still had the same denomination, but contained less silver and gold, which meant that people were actually paid with “lighter” money.

Why Bitcoin is fading now

Gromen’s message for 2025 is elementary: the price reduction theme may still be valid, while Bitcoin may still be a impoverished setup in the brief term. That’s why he talks about de-risking BTC even as he remains bullish on the broader macro direction.

RiskReversal argues that gold and some stocks currently express the devaluation trade more clearly than Bitcoin. It also outlines a scenario in which BTC could slide towards the $40,000 range in 2026.

The first signal he pays attention to is the price of Bitcoin in gold. He sees this as a warning sign if BTC fails to reach recent highs against gold. This ratio adds vital context. The number of ounces of gold needed to purchase one BTC has dropped to about 20 ounces, down from about 40 ounces in December 2024. His wording suggests that the focus on “hard asset hedging” has turned away from Bitcoin for now.

The second signal is technical issues. He points to breaks below key moving averages as a reason why the risk-reward ratio looks less attractive. Not “Bitcoin is dead”, but rather that the chart does not reward high exposure.

The third is macro pressures and narratives, especially quantum risk. Another headwind is the growing debate over quantum computing. The topic continues to resurface, in part because there have been proposals and discussions about moving Bitcoin away from legacy signature schemes as part of a longer post-quantum migration path.

Not only is he cautious, but he also doesn’t speak for everyone. Some Bitcoin-focused analysts strongly push back against this decision. Onchain Analyst Matt and researcher Troy Cross they argued that this looked like selling out on weakness and that the quantum angle was being treated more like an internet narrative than a direct threat.

How to track Gromen’s signals

If you want to follow this idea without copying anyone else’s trades, keep it mechanical. One approach is to check the same three signals every week: BTC versus gold, trend health, and flows.

1) Start with BTC priced in gold as a “store of value” test.

Gromen’s warning is less about Bitcoin being priced in dollars and more about Bitcoin not overtaking gold. If the BTC/gold ratio continues to decline, it’s difficult to argue that Bitcoin is currently a major “depreciation hedge,” even if the long-term history remains intact.

2) Add a trend filter to take the guesswork out of it

A elementary option is the 200-day elementary moving average (200D SMA). It is commonly used as a scratchy dividing line between long-term up and down trends because it smooths out the noise over a period of approximately 200 trading days.

It’s not that the SMA 200D is magical. The idea is to decide in advance what “damage to the trend” means, so as not to make emotional decisions on “red days”.

3) Apply ETF flows as confirmation, not as a primary signal

For a quick check on the public pulse, you can track the daily flows of US Bitcoin spot funds (ETFs) with Farside tables.

Flows won’t explain every move, but sustained outflows along with BTC’s impoverished performance against gold and a trend break create a sort of “three-strike” setup that, in Gromen’s terms, would justify reducing exposure.

A weekly checkup can be as elementary as:

• BTC to gold: Is it improving or getting worse?

• Tendency: Above or below SMA 200D?

• ETF Flows: Mostly inflows or outflows lately?

Did you know? A elementary moving average (SMA) is the average of the last N closing prices – e.g. the last 200 days. This is called “rolling” because each recent day replaces the oldest day in the calculation, allowing the line to be continually updated and short-term noise smoothed out.

How to “outshine BTC” without abandoning the humiliation thesis

In Gromen’s terms, “Bitcoin fading” simply means risk control. You can still believe in the put-down while admitting that Bitcoin may not be the best expression of that view right now.

Here is one illustrative way he framed this thinking, presented for educational purposes rather than as a strategy.

1) Divide your thinking into “basic” and “tactical”

• “Core” refers to what you are willing to maintain over a multi-year cycle.

• “Tactical” refers to what you reduce when the setup breaks down, based on relative performance and trend.

This is essentially restoring logical balance. A rules-based approach can reduce risk and, over time, can provide modest return benefits.

2) Determine what would make you add BTC again

Keep him tied to the same three signals:

• BTC for gold stops falling and starts to show an upward trend.

• Price fixes key trend levels: for example, a return above the 200D SMA.

• ETF flows no longer confirm continuing selling pressure.

3) Don’t ignore real-world friction

In markets with higher volatility and less correlation, the trade-off between how far you drift and how much you trade becomes more pronounced, which means you may need wider bands and fewer forced moves. Wellington makes this point directly in his discussion of trade-offs to restore balance.

Quantum risk: separating market fear from real timelines

Quantum risk matters for two reasons.

• First, this is a real, long-term security issue. If powerful quantum computers ever become practical on a enormous scale, some of today’s cryptography will need to be upgraded.

• Secondly, this is a short-term market narrative. Even if the technology doesn’t arrive soon, the headlines could still scare investors and accelerate risk reduction. That’s why it appears on Gromen’s list of reasons why Bitcoin may look breakable in the near future.

If you want a peaceful baseline in terms of time, a16z crypto argues that the emergence of a cryptographically significant quantum computer in the 2020s is highly unlikely.

However, moving enormous systems to post-quantum cryptography is operationally hard and may take years. National Institute of Standards and Technology finalized its first post-quantum cryptography standards in August 2024, publishing FIPS 203 (ML-KEM) for key exchange and encryption, along with FIPS 204 (ML-DSA) and FIPS 205 (SLH-DSA) for digital signatures. It is expected to take a long time to implement the solution across industries.

In the case of Bitcoin, the developer ecosystem is already debating possible migration paths. One example is a thread on the Bitcoin-Dev mailing list describing an informational post-quantum signature proposal, often referred to as the Bitcoin 360 Improvement Proposal. In parallel, Bitcoin Optech maintains a dedicated “quantum resistance” topic page to track developments in this area.

Synthesis

Gromen’s message makes more sense if you separate the regime from the vehicle.

• The regime’s call is a humiliation: Governments with high debt have incentives for inflation and currency weakness to reduce their real debt burden over time.

• The vehicle call is tactical: He wonders if Bitcoin is currently the best way to express this view.

Within it, Bitcoin can still fit its long-term history of humiliation. At the same time, this may be a position that needs to be corrected when the setup deteriorates, especially if BTC is lagging gold, the chart is broken, and a clamorous narrative like quantum risk is weighing on sentiment.

If you can follow BTC vs. gold, a elementary trend filter and basic flow control, you can understand the call without turning it into hero worship or panic selling.