Business cycle analyst Tomas (@TomasOnMarkets) recently shared insights on the current global economic climate and implied potential effects on risk assets, including Bitcoin. Tomas describes a “short and shallow” business cycle that began in 2023, weakened in 2024, and reached a low point in early 2025. He posits that a struggling Chinese economy and a strong dollar obscured this brief cycle.
Tomas explains, “We experienced an atypical, ‘short and shallow’ full business cycle recently which suppressed traditional PMI measures both in the US and globally.”
Tomas’s analysis leans on four real-time indicators of global economy: the inverted trade-weighted dollar index, Baltic Dry Index, 10-year Chinese Government bond yields, and the copper/gold ratio. By transforming these individual metrics into rolling yearly z-scores, Tomas has crafted an “equal-weighted composite z-score” he calls the Global Economy Index (GEI).
He elaborates, “The GEI was underwhelming to the upside in 2023 and 2024 and fell to levels typically correlated with the end of a business cycle in late 2024/early 2025.”
Tomas observes that prior to 2020’s disruptions, this composite measure appeared to lead US Manufacturing PMI data. The GEI’s recent rebound suggests a new business cycle might take hold, potentially peaking around 2026 or 2027.
Tomas also explores the relationship between the GEI, equities, and PMIs, noting that while the stock market generally leads business survey measures, it tends to trail the GEI. He adds that the S&P 500’s recent dip into negative year-over-year territory aligns with typical end-of-cycle price behavior.
As for Bitcoin, Tomas admits it’s an enigma. Bitcoin’s behavior vis-à-vis the macro environment seems to diverge from its usual volatility. He hypothesizes that Bitcoin has become less volatile and sensitive to business cycle swings, possibly due to ETFs and increased institutional interest. However, he also considers the possibility that Bitcoin might simply be trailing the stock market. He warns, “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 concludes by warning that if the GEI fails to sustain its recent rally and succumbs to a new low, the outlook could become more bearish. He speculates that the early 2025 rebound in the copper/gold ratio and shipping rates might have been prematurely triggered by tariff announcements, suggesting that these metrics’ recovery might not be as solid as it seems.
Tomas’s key point is that equities and the broader business cycle appear to be in late-stage territory. If his analysis is correct, a new cycle could be on the horizon, potentially deferring a significant Bitcoin peak until late 2026 or 2027. This prospect calls into question the long-term validity of Bitcoin’s four-year halving cycle.
“As it stands, the GEI signals the start of a new business cycle, which could peak in late 2026/2027. If Bitcoin continues its historical relationship with the business cycle, this could spell the end for the ‘four year halving cycle’ theory for Bitcoin price action,” Tomas concludes.
At the time of writing, BTC is trading at $79,428.
Featured image created with DALL.E, chart from TradingView.com.
