President Trump May Trigger Decorrelation Between Bitcoin and the Nasdaq, According to Macro Guru Luke Gromen

Macro investor Luke Gromen says that the White House may have caused a massive change in the way that Bitcoin (BTC) trades.

In a new interview with Natalie Brunell on the Coin Stories podcast, Gromen calls attention to the America First Investment Policy, a memo released by the Trump Administration in February that aims to make the US foreign investment policies more cautious and conscious of national security.

Gromen, the founder of the macroeconomic research firm Forest for the Trees (FFTT), says that the memo essentially directs China to “take your money and go home, we don’t want it here anymore.”

With all of the foreign capital invested in US markets, Gromen says the Nasdaq index will likely suffer capital outflows while Bitcoin – as a neutral global asset essentially exempt from tariffs or political agendas – will shine, breaking the correlation between the two assets.

“That, I think will ultimately be a catalyst to the separation of Bitcoin and Nasdaq, and that, I think, is starting to drive Nasdaq down – it has a long way to go because multiples are high – and in the short run, traders control the flows…

Bitcoin is levered Nasdaq, I get it; it’s a high-beta Nasdaq, in the short run. If you back up to a five-year or ten-year chart, you can see very clearly these periods where Bitcoin has massively outperformed Nasdaq, but they still tend to go directionally similarly, when Bitcoin’s up Nasdaq’s up and vice versa…

The America First Investment Policy memo, I think, will start to break that correlation because I think right now in the short run, that correlation is holding, [but] at some point I think capital flow is going to see Bitcoin for what it is which is a neutral reserve asset linked to energy, uncontrollable by any govenment and I think it’ll start siphoning some flows off from Nasdaq as America continues to say, ‘Listen, you want to invest in some factories here? Great, otherwise, get out.’ 

And that’s a lot of capital that’s got to get out, and we’re seeing gold benefit already. I think what we’re seeing in gold is a precursor to what we’ll see in Bitcoin.”

At time of writing, Bitcoin is worth $83,233.

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