According to a study by Sminston With and Plan C, larger business cycles became the dominant driver of Bitcoin’s price movements even before the second halving.
- Analysts stated that Bitcoin’s price is now driven primarily by macroeconomic conditions rather than halving events.
- The study showed business-cycle indicators like manufacturing PMI have a stronger correlation with Bitcoin’s price movements.
- It added that the impact of reduced miner supply has diminished due to deep liquidity and institutional participation.
A new analysis by crypto analysts Sminston With and Plan C on Wednesday stated that Bitcoin (BTC) broke away from its long-standing halving-driven framework far earlier than many investors assume, and that the cryptocurrency now behaves primarily as a “macro asset.”
The new study examined Bitcoin’s price behavior through the lens of the business cycle, using the ISM Manufacturing Purchasing Managers’ Index (PMI) as a proxy for economic conditions.
The analysis showed that when manufacturing activity expanded and economic conditions improved, Bitcoin outperformed its long-term trend. On the other hand, when growth slowed down or recession risks rose, Bitcoin struggled, regardless of where it sits in the halving cycle.
“The four-year cycle was a useful heuristic that has outlived its predictive power,” the report said, adding that its relevance has declined further with each passing year.
Bitcoin’s Shift From Halving Cycles To Macro Signals
According to the study, the business cycle became the dominant driver of Bitcoin’s price movements even before the second halving took place. It said that macroeconomic forces had already overtaken supply shocks as the primary influence on price as of 2016.
“Bitcoin has become a macro asset, and perhaps a top-rate macro indicator in its own right,” the study said. “The halving is a ceremonial event that spurred FOMO and had a supply mechanism that could well explain a bubble, but not for long after Genesis.”
Why Supply Cuts Matter Less Than Investors Think
The analysis also challenged the argument that halvings remain critical because they reduce the new Bitcoin supply. The study said that at today’s market scale, the impact of issuance cuts has become marginal.
After the 2024 halving, daily Bitcoin issuance dropped to roughly 450 BTC, worth about $45 million at a $100,000 price level. Daily trading volume, by comparison, regularly exceeds $30 billion. New supply now represents roughly 0.15% of daily trading activity, according to the report.
The study suggested that Bitcoin investors should pay closer attention to macroeconomic indicators than halving countdowns. Measures such as PMI readings, liquidity conditions, employment trends, and credit availability now offer clearer signals for Bitcoin’s performance, it explained.
Bitcoin’s price fell 1.4% in the last 24 hours to around $87,833 after the Federal Reserve’s decision to keep interest rates unchanged.
The crypto market is now eyeing Thursday's markup of the crypto market structure bill led by the Senate Agriculture Committee. Retail sentiment around the apex cryptocurrency fell to ‘extremely bearish’ from ‘bearish’ over the past day. The overall crypto market was down 1.3% as over $345 million in leverage bets were wiped out.
Read also: Bitcoin, Ethereum Drop While Gold Extends Record Run Following Fed Decision
For updates and corrections, email newsroom[at]stocktwits[dot]com.<
