- The current Bitcoin cycle lacks typical economic support.
- U.S. business activity remains in contraction.
- A business rebound could trigger major market upside.
Unlike previous 4-year Bitcoin cycles, this one is missing a critical ingredient: a rebound in the U.S. business cycle. Historically, a rise in the Purchasing Managers’ Index (PMI) – which reflects business expansion – has often lined up with sharp rallies in the crypto market .
But this time, the PMI has stayed low, deep in contraction territory. This means businesses are still reporting declining activity, and economic sentiment remains weak. Without this economic strength, markets haven’t entered the typical “euphoria” phase seen in past cycles.
Why Economic Expansion Matters for Bitcoin
In past bull markets, a strong economy played a key role in pushing Bitcoin and other assets higher. When businesses grow and investor confidence rises, more money flows into riskier assets like crypto. This often leads to a FOMO-driven rally that marks the peak of a cycle.
So far, we haven’t seen this wave. Investors are cautious, and macroeconomic indicators haven’t shown a clear turnaround. This raises an interesting possibility: maybe the current cycle hasn’t really begun in earnest.
Could the Best Be Yet to Come?
If the U.S. business cycle begins to recover — and signs of growth return — it could provide the fuel Bitcoin needs for its next leg up. A stronger economy typically boosts investor appetite for risk, potentially triggering another wave of inflows into crypto.
This scenario suggests the market may still have significant upside potential. In other words, we might still be early — and the real Bitcoin cycle could be just around the corner.
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