The popular belief that halvings drive bull markets is an oversimplification. Discover the real driver: global liquidity cycles that happen to coincide with Bitcoin's supply schedule.
The popular narrative goes: "Bitcoin halvings reduce supply, so price must go up." This sounds logical but doesn't hold up under scrutiny:
Research from Michael Howell (CrossBorder Capital) and Raoul Pal (Real Vision) reveals the true correlation: Bitcoin follows global liquidity with ~85% correlation and a 75-day lag.
The Coincidence: Bitcoin's ~4-year halving cycle happens to roughly align with typical central bank policy cycles. This coincidental timing has reinforced the halving narrative, but the actual driver is monetary policy, not supply reduction.
Explore the macro forces that drive Bitcoin cycles — from liquidity conditions to business cycle timing
| # | Macro Indicator | |
|---|---|---|
| 1 | Global LiquidityMacro backdrop | |
| └ | Fed Policy & US LiquidityUS-focused (more volatile) | |
| 2 | ISMBusiness cycle | |
| 3 | GL + ISMCombined macro phases | |
| 4 | Macro Cycle IndexWhere we are now and what to do | |
| 📚 | EducationFull cycle analysis guide | HERE |
Often attributed to the May 2020 halving, but actually coincided with unprecedented COVID stimulus. The Fed's balance sheet expanded by $4 trillion. M2 money supply grew 25% in 12 months. Bitcoin followed liquidity, not the halving.
Fed began QT (quantitative tightening) and raised rates aggressively. Global liquidity contracted. Bitcoin fell 77% despite being 2 years post-halving. Supply schedule was irrelevant - liquidity conditions determined price.
Rally began in late 2023 with ETF anticipation and liquidity stabilization - before the April 2024 halving. The halving was a narrative catalyst, but price was already recovering on improved liquidity conditions and institutional demand (ETF flows).
Beyond liquidity, several factors can create significant price movements independent of halvings:
ETF approvals, custody solutions, and regulatory clarity enable new capital pools to enter the market.
Major regulatory decisions (positive or negative) can create short-term supply/demand shocks.
Banking crises, currency devaluations, and geopolitical events can drive safe-haven demand.
Corporate treasury adoption, payment integration, and nation-state adoption create narrative catalysts.
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