Global Economy Index Signals Late-Stage Cycle, Bitcoin's Halving Theory Challenged
2min read Business cycle analyst Tomas (@TomasOnMarkets) recently shared insights on the current state of the global economy and its implications for risk assets, including Bitcoin. He described a "short and shallow" full business cycle that began in 2023, weakened in 2024, and reached its lowest point in early 2025. This cycle was partially obscured by a sluggish economy and a rapidly strengthening dollar.
Tomas' analysis is based on four real-time measures of the global economy: the inverted trade-weighted dollar index, the Baltic Dry Index, 10-year Chinese Government bond yields, and the copper/gold ratio. By converting these data points into rolling yearly z-scores, he created an "equal-weighted composite z-score" known as the Global Economy Index (GEI).
According to Tomas, the GEI showed underwhelming performance in 2023 and 2024, failing to reach the "business cycle peaking zone." It then declined to levels typically associated with the end of a business cycle in late 2024/early 2025. This composite measure historically led US Manufacturing PMI data before the disruptive events of 2020. Tomas suggests that the recent rebound in the GEI could indicate a new business cycle, potentially peaking around late 2026 or 2027.
Tomas also discussed the relationship between the GEI, equities, and PMIs. He noted that the stock market usually leads business survey measures but tends to lag the GEI. The S&P 500 recently entered negative year-over-year territory, which Tomas sees as typical end-of-cycle price behavior. He believes that the S&P 500 has reached an acceptable "end of business cycle bottoming level."
Bitcoin, however, remains an outlier. Tomas acknowledges that Bitcoin has so far resisted typical "end of business cycle" drawdowns. He speculates that Bitcoin might have become less volatile and less sensitive to business cycle swings due to factors such as ETFs and higher institutional interest. Alternatively, Bitcoin might simply be lagging the stock market. Regardless, Tomas warns that if Bitcoin continues its historical relationship with the business cycle, it could challenge the "four-year halving cycle" theory for Bitcoin price action.
Tomas concludes by cautioning that if the global economy index fails to maintain its recent bounce and instead rolls over to a new low, the outlook could turn more bearish, especially if tariff headwinds worsen. He speculates that part of the rebound seen in copper/gold and shipping rates in early 2025 may have been frontloaded by tariff announcements, hinting that the recovery in those metrics might not be as robust as it appears on the surface.
The key takeaway from Tomas' perspective is that equities and the broader business cycle appear to be in late-stage territory. If his assessment holds, a new cycle could begin soon, potentially postponing any meaningful Bitcoin peak until late 2026 or even 2027. This calls into question any assumptions about the enduring validity of Bitcoin’s four-year halving cycle.
