Translation: Cognitive Alchemy

In mid to late November 2025, macro analyst Luke Gromen, who has long been optimistic about Bitcoin and gold, sold off the vast majority of his Bitcoin holdings—not a complete liquidation, but a clear phased reduction, sparking considerable discussion in the market.

Yesterday, in his final video of 2025, Luke systematically explained the thought process behind this decision for the first time.

He discussed not just Bitcoin, but a whole set of interrelated judgments: why he remains cautious about Bitcoin in the short term, why he still favors precious metals, and how he understands the emerging "multipolar world."

These views may seem scattered, but they point to the same issue: the macro environment we are familiar with is changing.

For the past thirty years: in the U.S. market, the bond market has won, Wall Street has won, and holders of financial assets have won; while manufacturing, industrial capacity, and the working class have been long squeezed.

Starting in 2025, with geopolitical competition, supply chain security, and industrial foundations becoming hard constraints, the U.S. government's policy objective function is being forced to change.

We are moving away from a "financial-first" world and entering a world where "real politics is returning."

You may completely disagree with Luke's judgment on Bitcoin's short-term trajectory—this is not a black-and-white question. But this macro signal is worth serious consideration by all long-term investors:

This world is no longer one where "financial assets naturally benefit."

Because of this, it is necessary to remind ourselves of something often overlooked: long-term investing does not mean you must always be in the market at every stage.

Sometimes, true long-term thinking is knowing when to step back, maintain judgment, and not let short-term fluctuations force you into irreversible choices at the wrong time.

If these discussions help you view the market more calmly in the coming period, then they have fulfilled their purpose.

The rest is your own rhythm.

The following content is a translation of the original text from Luke's video, and I hope it inspires you.

Original Video Translation

This is my last public video update for 2025.

To be honest, this year has been quite exhausting; at times it feels like "aging at the rate of a dog." But because of this, I want to clarify some key judgments rather than leave more misunderstandings.

The most frequently asked question recently has been: Why did you sell off most of your Bitcoin in the short term?

Let me clarify the most important point upfront: I did not liquidate my Bitcoin holdings. I still have a long-term positive outlook on it.

However, over the past month, I did sell off a significant portion of my holdings, not due to emotions or price, but because my judgment about "sequence" has changed.

1. What I Previously Got Right and Wrong

I have long believed that Bitcoin is the last functioning "liquidity smoke detector" in the global financial system. When liquidity begins to tighten, it often sounds the alarm first. This has been repeatedly validated over the past few years.

But I must also admit one thing: I was wrong about Bitcoin's role in a "deflationary environment."

I originally thought it would act more like a "neutral reserve asset" in deflation. But reality has shown me that when true deflation arrives, Bitcoin's trading behavior resembles that of a high Beta tech stock.

This is not a matter of stance; it is a fact.

2. Why Does Bitcoin Become Vulnerable in Deflation?

The reason is quite simple, though many are reluctant to view it from this angle.

We are currently in a highly leveraged global economic system. In such a system, any asset can be understood within the framework of "capital structure."

When liquidity is abundant and asset prices rise → the "equity layer" at the bottom of the capital structure performs the best.

When deflation occurs → the equity layer is hit first and hardest.

In 2008, the equity layer of CDOs and CLOs disappeared in this manner.

And I am increasingly convinced that: Bitcoin, in the current system, is precisely the "equity layer."

This is not a denigration; it is a realistic judgment of its position.

3. What Truly Changed My Judgment Was AI and Robotics

If it were just an ordinary economic downturn, I might not have sold.

What truly made me reassess the sequence was seeing AI and robotics creating an "exponential" deflationary force.

This round of deflation has three characteristics:

• It stems from technological efficiency, not from demand cycles.

• It is beginning to substantially impact employment, especially for young people.

• It spreads very quickly.

In this environment, any policy below "nuclear-level money printing" is effectively tightening.

And in a tightening environment, what is hit first? It is still the equity layer.

This is the core reason why I have become cautious about Bitcoin in the short term and sold off most of my position.

4. I Am Not Denying Bitcoin, But Correcting the "Time Sequence"

I still believe that deflation will ultimately trigger a crisis, and that crisis will likely force a truly large-scale monetary response.

But I now think that this step will not come so quickly.

To be frank, I previously overestimated the speed of policy response. I thought they would act sooner, but they haven't, and I no longer believe they will act quickly.

So for me, this is a question of sequence: Before the policy truly shifts, before "nuclear-level responses" emerge, I prefer to step away from the most vulnerable layer of the capital structure, wait for prices to reflect reality more fully, and then come back.

I might be wrong. I might be "calculating too finely." But this is my most honest judgment at the moment.

5. So Why Am I More Willing to Hold Silver?

Silver is not an emotional judgment; it is a structural judgment.

What I see is: industrial demand is continuously rising, and the supply side has almost no capacity for rapid expansion. Even if prices rise, it is difficult to quickly form an effective supply response.

Unless we destroy demand with a deep recession. But if that really happens, the world will instead return more quickly to the "crisis—money printing" path.

From this perspective, the logic of silver is more direct and simpler.

6. Behind This, There Is Actually a Larger Structural Change

What I want to clarify this time is not just about Bitcoin or silver.

What I really want to say is: We are moving away from a "financial-first" world and entering a world where "real politics is returning."

For the past thirty years: the bond market has won, Wall Street has won, and holders of financial assets have won; while manufacturing, industrial capacity, and the working class have been long squeezed.

Now, with national competition, supply chain security, and industrial foundations becoming hard constraints, the policy objective function is being forced to change.

This does not mean a beautiful, low-interest, weak dollar utopia. It is more likely to be a world that is: more unstable, more frictional, less "elegant," but also more real.

Conclusion: All I Can Do Is Clarify What I See

I know these judgments are not popular, especially when sentiment remains highly optimistic.

But I always believe that: it is more important to clarify the logic than to make people feel comfortable.

I still respect the long-term significance of Bitcoin and am still preparing for that "true turning point."

It's just that now, I choose to stand aside and see where this round of deflation truly leads.

This is the most honest explanation I can provide at the end of 2025.

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