In a discussion on X, business cycle analyst Tomas (@TomasOnMarkets) provides insights into the current state of the global economy and its implications for risk assets such as Bitcoin. He describes a “short and shallow” full business cycle that began in 2023, diminished in 2024, and reached its lowest point in early 2025. According to Tomas, this brief cycle is partially obscured by a struggling Chinese economy and a rapidly strengthening dollar.
He states, “The general idea behind this theory is that we have experienced an unusual, ‘short and shallow’ full business cycle in recent years that suppressed traditional PMI metrics both in the US and globally.”
Tomas bases his analysis on four real-time indicators of the global economy, which include 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, he devised an “equal-weighted composite z-score” known as the Global Economy Index (GEI).
He observes, “It’s clear that the GEI failed to show significant upside in 2023 and 2024 (it didn’t reach the ‘business cycle peaking zone’). Furthermore, it dropped to levels typically associated with the conclusion of a business cycle in late 2024/early 2025 (‘business cycle troughing zone’).”
This composite index seemed to precede US Manufacturing PMI data ahead of the disruptive events in 2020. Tomas emphasizes this relationship by shifting the GEI forward by six months. While he notes a break in the trend around the 2020 pandemic and the ensuing significant interventions by central banks, he still sees potential for the recent rebound in the GEI to signify the onset of a new “fresh” business cycle that could peak around late 2026 or 2027. “Historically,” he writes, “this new business cycle is expected to peak around late 2026/2027.”
Furthermore, he discusses the relationship between the GEI, equities, and PMIs, stating that the stock market often leads business survey measures but tends to lag behind the GEI. “When examining the details, it’s evident that the stock market typically leads PMI data but lags the GEI, positioning it somewhere in between most of the time,” he asserts. He highlights that the S&P 500 has recently dipped into negative year-over-year territory, a behavior he regards as characteristic of end-of-cycle pricing. “The S&P 500 has now reached what would historically be considered an ‘end of business cycle bottoming level.’”
The Implications For Bitcoin
Bitcoin, however, remains an unpredictable element. Tomas concedes that while the leading-lag relationship of the GEI, stock market, and PMIs commonly applies to most risk assets, Bitcoin seems to be diverging from its typical volatility concerning the broader macro environment. “The piece of the puzzle that doesn’t seem to fit historically is Bitcoin,” he asserts.
He notes that Bitcoin has so far resisted typical “end of business cycle” downturns and speculates whether it has matured into a less volatile and less responsive asset due to increased ETF presence and institutional interest. However, he also considers the possibility that Bitcoin may merely be lagging the stock market. Regardless, he cautions that “if Bitcoin maintains its historical correlation with the business cycle,” this could effectively nullify the ‘four-year halving cycle’ theory for Bitcoin price dynamics.
Tomas concludes with a warning that if the Global Economy Index fails to uphold its recent recovery and instead declines to a new low, the outlook could become increasingly bearish, particularly if tariff-related challenges intensify. He speculates that part of the rebound in copper/gold and shipping metrics in early 2025 might have been driven by preemptive tariff announcements, suggesting that the recovery in these indicators may not be as strong as it appears.
Ultimately, he believes that equities and the larger business cycle seem to be in a late-stage phase, and if his analysis holds true, a new cycle could be on the verge of initiation — one that lasts long enough to delay any significant Bitcoin peak until late 2026 or 2027, raising questions about the sustained relevance of Bitcoin’s four-year halving cycle.
“One more thing to highlight is that the GEI currently indicates the beginning of a new business cycle, which is expected to peak around late 2026/2027. If Bitcoin continues its historical correlation with the business cycle, this would likely invalidate the ‘four-year halving cycle’ theory for Bitcoin price movements,” Tomas concludes.
As of press time, BTC is trading at $79,428.
