The Order of Operations
Macro analyst Luke Gromen warned investors this week that Bitcoin remains vulnerable to a severe, deflationary clearing event akin to the March 2020 crash. Speaking in a client update, the Forest for the Trees founder argued that while massive central bank liquidity is inevitable, the market is mispricing the sequence of events. The crash likely comes first.
Bitcoin (BTC) traded flat at $95,200 on Saturday, hovering 25% below its October 2025 highs.
High Beta, Not Safe Haven
Gromen’s thesis challenges the “digital gold” narrative in the short term. He noted that Bitcoin currently trades with the correlation profile of a high-beta technology stock rather than a neutral reserve asset. In a liquidity shock, correlations go to one.
“If we do get AI-driven deflation, unless Bitcoin starts trading like a reserve asset, then I think the faster that AI goes, the more risk there is that Bitcoin does a COVID March 2020 type of thing.”
In March 2020, Bitcoin liquidated 50% of its value (dropping from ~$10,000 to ~$3,800) in days as leverage washed out of the system. Gromen suggests a similar percentage drawdown is possible if AI advancements accelerate deflationary pressures in the real economy before the Federal Reserve reacts.
The Deflationary Trigger
The core risk lies in the lag time between economic deterioration and policy response. Gromen argues that widespread AI adoption could trigger an “exponential” deflationary pulse, collapsing wages and prices, faster than regulators can print money to offset it. This creates a liquidity air pocket where all risk assets, including crypto, are sold for cash.
Despite the bearish tactical outlook, Gromen remains structurally bullish. His “order of operations” implies that the coming crash is the necessary precondition to force the Federal Reserve into “nuclear printing,” which would ultimately send hard assets like Bitcoin vertical.
