Dialogue with a Macro Analyst: AI Sucks All Liquidity Out of U.S. Stocks, Bitcoin’s Bottom is $40,000

Compiled & Edited by: Odaily TechFlow

Guest: Luke Groman, Founder of FFT LC & Institutional Macro Strategist

Podcast Source: Coin Stories

Original Title: The $40K Bitcoin Bottom Coming?

Air Date: June 5, 2026

Key Takeaways

US long-term Treasury bond futures have depreciated 90% against gold over the past 10 years, yet GDP continues to grow — implying that 90% may not be enough. That’s the wake-up call from Luke Groman, founder of FFT LC and a 30-year Wall Street veteran macro strategist, aimed at all investors.

In this conversation, he lays out a stark yet coherent analytical framework: While the S&P 500 appears to hit new highs, it’s actually driven solely by seven AI stocks, and Bitcoin, the "last functioning smoke alarm for liquidity," is sending out warnings.

If you want to understand why Groman sold most of his Bitcoin near the top and hasn't bought back, why he believes dollar-denominated stocks will continue to rise but will fall when measured in gold and Bitcoin, and why technical indicators suggest Bitcoin could retrace to the $40,000 range, this podcast is worth your time.

Highlights

Why hasn’t Luke Groman bought back into Bitcoin yet?

• "I bought a small amount, but basically the answer is no. I haven't really bought back in. I didn't sell everything, but I sold most of it."
• "I'm watching. Bitcoin has had a pretty rough time lately."

The Divergence Mystery: Stocks Hitting New Highs While Bitcoin Liquidity Dries Up

• "Bitcoin is the smoke alarm for liquidity, probably the last one still working properly, and it's telling us something isn't right."
• "AI is sucking all the oxygen out of the room, sucking up all the liquidity. I think this is happening to Bitcoin too."

The Illusion of Value: How Accounting Artificially Inflates AI Valuations

• "The faster you build and the less cash flow you have, the higher and faster your reported earnings climb – but you become desperately short of cash."
• "Once construction slows down and revenue growth starts to decelerate, the lag effect of amortization catches up, and then the situation reverses."

Rising in Dollar Terms, Falling in Gold and Bitcoin Terms

• "My base case is: Stocks will be up big in dollar terms but down big in gold and Bitcoin terms."
• "Over the past 10 years, US long-term Treasury bond futures are down 90% against gold, and GDP is still growing – which means 90% isn't enough."

China’s Grip on Rare Earths

• "Trillions of dollars in US stock market value – especially tech, but not limited to it – all sit on rare earths, a commodity sector that's minuscule in size."
• "China dominates this field. Why? First, they've been at it for 30 years. Second, they have more engineers than anyone else and fewer environmental regulations."
• "The US government is now explicitly intervening in this sector. Historically, when governments intervene in companies, those companies are rarely good investments."

The Strait of Hormuz: America's 'Suez Moment'

• "My base case is, it's like a person jumping from a 100-story building, passing the 40th floor and saying, 'Hey, this feels like flying, it's great.' What kills you isn't the fall; it's the sudden stop."
• "When you face this level of complacency, this level of inventory decline… why isn't it reopening yet? That's what keeps surprising those of us in the 'tails'."

Why is Iran Keeping the Strait of Hormuz Closed?

• "Rationing demand through price means a recession. That's what it means. And it will come alongside inflation – a stagflationary recession."
• "If I were in Iran's shoes – I've been bombed, I've held on this long, I've prepared for this day for 40 years, dug countless tunnels, and they haven't destroyed nearly as much as they think."

Surge in 'Non-Monetary' Gold Exports from the US to China

• "In five of the past six months, non-monetary gold has been the single largest US export item."
• "Many Trump supporters have issued statements saying, 'Look how much Trump has narrowed the trade deficit!' The deficit is indeed shrinking, and the biggest marginal change is – gold exports."

Building a Proof-of-Work System Where 'The Ticket is the Settlement'

• "The world is moving toward a 'no ticky, no washy' system. What does that mean? It means – The US wants rare earths, bring gold, or the next shipment won't arrive; China wants oil, bring gold, or the next shipment won't arrive."
• "Nobody trusts anyone anymore. And in a world like that, where does the world go? To ledgers you can't trust – you need trust-free settlement methods."

When Debt-to-GDP Hits 130%: What Happened in 58 out of 58 Cases

• "In 150 years, 58 countries have seen their debt-to-GDP reach 130%. To date, 58 out of 58 have defaulted – primarily through a significant period of inflation."
• "If AI doesn't destroy jobs, then it's not the greatest thing since the internet, and it doesn't deserve these valuations. If it is the greatest thing and the valuations are justified, then white-collar employment is about to be decimated – and US employment contributes half of tax revenue."

Do Technical Indicators Point to a $40,000 Bitcoin Bottom?

• "If you actually buy back in the $40,000 to $50,000 range, you become an absolute legend – because you sold near the top."
• "They predict a bottom around Q3, Q4, roughly in the $40,000 range. I genuinely think we might actually see that level."

Why hasn’t Luke Groman bought back into Bitcoin yet?

Host Natalie Brunell: Let's start with the Bitcoin question on everyone's mind: Have you started buying back in, or are you waiting for it to drop further? It hasn't been performing well the last few days.

Luke Groman:

The last few days have been brutal. I bought a small test position, but basically the answer is: I haven't really re-entered. I didn't sell my entire position, but I sold most of it. Bitcoin's recent performance – especially over the last three or four days – has been pretty tough.

The Divergence Mystery: Stocks Hitting New Highs While Bitcoin Liquidity Dries Up

Host Natalie Brunell: Can you break down why this is happening? We see the stock market with so much momentum, constantly hitting new all-time highs. It reminds me of the stock market in 2021 – new highs one after another. But back then, Bitcoin was also performing very well; we were in a bull market. So what's behind this divergence today?

Luke Groman:

I'm not sure, but my working hypothesis is: if you look at the underlying foundation of this market rally, it's not healthy. Indexes are hitting new highs, new highs, new highs, but it's essentially just seven stocks. I saw a chart yesterday: Excluding AI-related names, the S&P 500 is actually slightly below its level before the Iran war started. I saw another chart: If you compare the US MSCI with the MSCI Emerging Markets excluding the US, and then take out TSMC, Samsung, and another large AI or memory-related company from the EM index – the narrative looks like EM is crushing the US, but take out those three or four AI-related names, and EM is actually getting crushed. That's the breadth issue. We've seen a lot of discussion about market breadth, and I think the breadth underlying the current headline index levels is extremely poor. Ultimately, what's happening is, AI is sucking all the oxygen out of the room, sucking up all the liquidity, concentrating it all in one sector. I think this is also happening to Bitcoin; it's a victim of the same dynamic. I believe Bitcoin is the smoke alarm for liquidity, probably the last one still working properly, and it's telling us something isn't right. At the same time, oil is sucking up liquidity too, or we should say the Trump administration, the US, is doing everything it can to try and keep oil prices down. Mainly through jawboning and releasing Western strategic petroleum reserves. But oil prices still went up. Since the war started, even at the current relatively low levels, they've risen about 50%. So, I think oil is sucking up liquidity, commodities are sucking up liquidity, and AI is sucking up liquidity. From a liquidity perspective, any asset that isn't one of these three, or isn't directly related to them, isn't performing well – mostly flat or down.

The Illusion of Value: How Accounting Artificially Inflates AI Valuations

Host Natalie Brunell: Regarding AI companies, one interesting point is: some call it a bubble, others say it's not. Their P/E ratios aren't really that high, completely different from the internet bubble era. They believe there's still a lot of room. But I remember you wrote about accounting issues – something about front-loading all the demand, all the investment is happening now, but it will take many years to generate real revenue. Those data centers need to be built and start generating actual growth years from now – but all the investment is being poured in right now.

Luke Groman:

The problem isn't that real growth isn't happening; it's more about the accounting method. Because the way accounting works, you front-load the construction spending, you amortize the revenue, and you amortize the expenses over a longer cycle. The effect of this accounting on reported earnings is: The faster you build and the less cash flow you have, the higher and faster your reported earnings climb. But you become desperately short of cash because you're constantly spending money, even though your book earnings are high.

You can expect to see earnings estimates being revised upwards and stock prices responding accordingly. You can also expect to see them go from financing with cash, to needing to borrow, to needing to borrow more – and we are indeed seeing this happen. Where it gets really tricky is when this construction cycle slows down for any reason – whether it's because we can't buy the physical raw materials, or chip supply interruptions, or zoning approvals for data centers getting stalled in various places – whatever the reason, once construction slows down, your revenue growth starts to decelerate, and the lag effect of amortization starts to catch up, and then the situation reverses. Earnings will decelerate sharply or even start to decline. Most of that decline will be non-cash, and you'll see cash flow actually start to rise.

So the question becomes: how will the market treat this situation? Will it see "earnings are slowing but cash flow is now healthy"? On one hand, these stocks aren't particularly expensive on a valuation basis, which suggests it doesn't have to be a catastrophe. But on the other hand, they have enormous momentum and are sucking up all the liquidity. So if earnings start to decelerate, why would I hold onto them instead of holding any other asset that previously had its liquidity sucked away? Will capital start to leave this field for somewhere else? I suspect the latter is more likely – at that point, they'll underperform for a while.

But this also brings up a difficult question: when does that deceleration happen? What triggers it? There are many different factors that could cause it. And I think there's a complicating factor now that didn't exist in 1999: in '99, we had free markets. Back then, you could say the government wasn't very involved in the market; it was 'peak America.' Now, the government is deeply involved. Back then, we were a unipolar hegemon; now we're not – we're in a new great power competition. So, back then, the internet bubble burst under its own weight because it collapsed on itself. Today, I would also think this cycle collapses or reverses under its own weight at some point, but it won't be allowed to burst on its own because AI has been identified as a key battleground in the great power competition. That's the tricky part – the government is very likely to step in and support it, to take whatever actions they deem necessary to keep this construction expansion going. And that also means it will continue to suck oxygen away from everything else, creating more problems. A lot of things remind me of 1999 to 2000, but there are some things I think are different this time.

Rising in Dollar Terms, Falling in Gold and Bitcoin Terms

Host Natalie Brunell: A lot of people are saying the stock market is about to crash, we're near the top, but it sounds like this cycle could last quite a while longer. I know you are generally cautious on the stock market, you've been very focused on gold and infrastructure. Do you think the prices of gold and Bitcoin will be suppressed? For Bitcoin maxis, I remember you said it might trade sideways in the $58,000 to $72,000 range for a considerable time.

Luke Groman:

That was somewhat a half-joking comment, but I also genuinely see that when you look at what's happening, it seems the US is trying to promote decoupling from China. Therefore, certain things are politically necessary: you need a weaker Yen, a weaker Won to help shift production capacity out of China; you need a weaker Dollar to promote manufacturing reshoring. All of these should, in essence, be very bullish for gold and Bitcoin. However, there are forces within the US that don't want to see this, because a rise in gold and Bitcoin sends a signal to the world: "You're just printing money without restraint." This creates problems in the Treasury market's ability to raise funds, especially given the movement in the 10-year yield since this war started.

I think the way they achieve it is – by expanding the derivatives market, just as they have historically done with gold. I don't think they can do this to Bitcoin long-term; but in the short term, as long as you can amplify the derivatives market, you can. A few months ago, someone mentioned that a lot of people were selling call options – essentially being passively short. You're satisfying demand: someone wants Bitcoin exposure, but instead of buying Bitcoin itself, they buy call options on Bitcoin. Without these derivatives, the only way to get Bitcoin exposure was to buy Bitcoin