The connection between Luther and Hitler is absurd. Luther didn’t lay the groundwork for Hitler. The fact is that most Europeans and most Christians throughout the last 2,000 years have disliked the Jews. There are any number of reasons for this, beginning with the crucifixion of Christ. Beyond that, the Papacy prohibited Christians from charging interest on money. As such, Jews for many centuries were the only ones in Europe who were willing to lend money. No one likes having to pay their banker back.
As for the National Socialists, one of their plans was to deport all the Jews to Madagascar. Presumably they would have had their own state, similar to what Israel is though likely less politically problematic. Obviously they ended up choosing to kill the Jews rather than deport them. In the very least, deportation was on the table.