Bitcoin’s Next Big Boom? Not Until 2026, Says Expert 🤔📉

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In a thread on X, Tomas (@TomasOnMarkets), a business cycle analyst with the air of a man who has seen too many charts, offered his take on the global economy and its implications for risk assets like Bitcoin. He described a “short and shallow” business cycle that began in 2023, fizzled out in 2024, and hit rock bottom in early 2025. This fleeting cycle, he argued, was obscured by a sluggish Chinese economy and a dollar that seemed to be on steroids. “The general gist,” he said, “is that we’ve been living through an abnormal cycle that suppressed traditional PMI measures both in the US and globally.”

Tomas’s analysis hinges on four real-time measures of the global economy: the inverted trade-weighted dollar index, the Baltic Dry Index, 10-year Chinese Government bond yields, and the copper/gold ratio. By converting these into rolling yearly z-scores, he created something he calls the Global Economy Index (GEI). “You can see clearly,” he noted, “that the GEI was underwhelming in 2023 and 2024, didn’t reach the ‘business cycle peaking zone,’ and then fell to levels typically correlated with the end of a cycle in late 2024/early 2025.”

This composite measure, he explained, seemed to lead US Manufacturing PMI data before the chaos of 2020. Tomas highlighted this relationship by shifting the GEI forward by six months. While the pattern broke during the pandemic and subsequent central bank interventions, he suggested that the GEI’s recent rebound might signal a new business cycle, potentially peaking around late 2026 or 2027. “Based on historical precedent,” he wrote, “this new cycle could reasonably be expected to peak around late 2026/2027.”

He also delved into the interplay between the GEI, equities, and PMIs, noting that the stock market usually leads business survey measures but lags the GEI. “If we peel back the layers of the onion,” he said, “we find the stock market generally leads PMI measures but generally lags the GEI, so it lives somewhere in the middle, most of the time.” He pointed out that the S&P 500 recently slipped into negative year-over-year territory, which he sees as typical of end-of-cycle behavior. “The S&P 500 has now hit what would historically be an acceptable ‘end of business cycle bottoming level.’”

Bitcoin: The Wildcard 🃏

Bitcoin, however, remains the enigma. Tomas acknowledged that the leading-lag relationship of the GEI, stock market, and PMIs might apply to most risk assets, but Bitcoin seems to be playing by its own rules this time. “The piece of the jigsaw that doesn’t seem to fit at all (by historical precedent) is Bitcoin,” he wrote. It has resisted typical “end of business cycle” drawdowns, leading him to speculate whether Bitcoin has “just grown up and become less volatile and less sensitive to business cycle swings — potentially due to ETFs and higher institutional interest.” Or, perhaps, it’s simply lagging the stock market. Either way, he warned, “if Bitcoin continues its historical relationship with the business cycle, this would probably obliterate the ‘four year halving cycle’ theory for Bitcoin price action.”

Tomas concluded with a note of caution: if the GEI fails to maintain its recent bounce and instead rolls over to a new low, the outlook could turn more bearish, especially if tariff headwinds worsen. He speculated that part of the rebound seen in copper/gold and shipping rates in early 2025 may have been frontloaded by tariff announcements, hinting that the recovery might not be as robust as it appears. Still, the key takeaway, he said, is that equities and the broader business cycle appear to be in late-stage territory. If his assessment holds, a new cycle could begin soon — one that runs long enough to postpone any meaningful Bitcoin peak until late 2026 or even 2027, calling into question the enduring validity of Bitcoin’s four-year halving cycle.

“Another point to note,” he concluded, “is that the GEI is currently signaling the start of a new business cycle, which could reasonably be expected to peak in late 2026/2027. If Bitcoin continues its historical relationship with the business cycle, this would probably obliterate the ‘four year halving cycle’ theory for Bitcoin price action.”

At press time, BTC traded at $79,428. 🤑

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2025-04-09 07:40