In a discussion thread on X, business cycle specialist Tomas (@TomasOnMarkets) shares insights about the current state of the global economy and its implications for risk assets, including Bitcoin. He characterizes the recent business cycle as “short and shallow,” starting in 2023, tapering in 2024, and reaching its lowest point in early 2025. Tomas argues that this brief cycle was partly obscured by a sluggish Chinese economy alongside a rapidly strengthening US dollar.
He states, “The general gist of the theory was that we experienced an abnormal, ‘short and shallow’ full business cycle in recent years that depressed traditional PMI indicators both in the US and globally.”
Tomas’ analysis is founded on four real-time indicators of the global economy. He examines the inverted trade-weighted dollar index, Baltic Dry Index, 10-year Chinese Government bond yields, and the copper/gold ratio. By transforming these individual data points into rolling annual z-scores, he fashioned an “equal-weighted composite z-score” he refers to as the Global Economy Index (GEI).
He observes, “It’s evident that the GEI performed disappointingly to the upside in 2023 and 2024 (failing to reach the ‘business cycle peaking zone’). Subsequently, it declined to levels typically associated with the end of a business cycle in late 2024/early 2025 (‘business cycle troughing zone’).”
This composite measurement has previously led US Manufacturing PMI data prior to the disruptions in 2020, and Tomas underscores this correlation by advancing the GEI by six months. He notes a deviation in the trend following the 2020 pandemic and subsequent major central bank interventions, yet he posits that the recent rebound in the GEI may suggest the emergence of a new “fresh” business cycle expected to peak around late 2026 or 2027. “Based on historical precedent,” he states, “this new business cycle could reasonably be predicted to culminate around late 2026/2027.”
Tomas also examines the interaction among the GEI, equities, and PMIs, highlighting that while the stock market typically leads business survey measures, it usually lags the GEI. “If we peel back the layers of the onion, we find that the stock market generally precedes PMI measures but generally lags the GEI, positioning it somewhere in the middle most of the time,” he explains. He notes that the S&P 500 has recently dipped into negative year-over-year territory, which he interprets as characteristic of typical end-of-cycle pricing behavior. “The S&P 500 has now reached what would historically be considered an ‘end of business cycle bottoming level.’”
The Implications For Bitcoin
However, Bitcoin remains unpredictable. Tomas concedes that the leading-lag relationships between the GEI, stock market, and PMIs might generally be applicable to most risk assets, but this time, Bitcoin is diverging from its usual volatility in response to the macro environment. “The piece of the jigsaw that doesn’t seem to fit at all (by historical precedent) is Bitcoin,” he remarks.
He recognizes that Bitcoin has thus far avoided the typical drawdowns associated with the “end of business cycle” and speculates whether “Bitcoin has matured and become less volatile and less affected by business cycle fluctuations — possibly due to ETFs and increased institutional interest.” Yet he also considers the possibility that Bitcoin could simply be lagging the stock market. Regardless, he warns, “If Bitcoin continues its historical correlation with the business cycle,” this could very well dismantle the ‘four-year halving cycle’ hypothesis regarding Bitcoin price behavior.
Tomas wraps up with a warning that if the Global Economy Index fails to sustain its recent uptick and instead declines to a new low, the outlook might become more pessimistic, particularly if so-called tariff challenges exacerbate. He speculates that part of the bounce seen in copper/gold and shipping rates in early 2025 may have been preemptively influenced by tariff announcements, suggesting that the recovery in these metrics may not be as substantial as it seems.
Ultimately, the crucial insight from his perspective is that both equities and the overall business cycle seem to be in a late-stage phase, and if his analysis is accurate, a new cycle could commence imminently — one that lasts long enough to delay any significant Bitcoin peak until late 2026 or even 2027, challenging assumptions about the continued relevance of Bitcoin’s four-year halving cycle.
“Another point to note is that the GEI is currently indicating the onset of a new business cycle, which could reasonably be anticipated to peak around late 2026/2027. If Bitcoin continues its historical association with the business cycle, it would likely nullify the ‘four-year halving cycle’ theory regarding Bitcoin price action,” Tomas concludes.
At the time of writing, BTC was trading at $79,428.
Disclaimer: For informational purposes only. Past performance is not indicative of future results.
