The Bitcoin halving event is now nearly six months behind us, and many are questioning whether the classic four-year market cycle theory still holds. Despite the uncertainty, several compelling factors suggest that the fourth major crypto bull market could be on the horizon. Here are three core reasons supporting this outlook.
Global Liquidity Expansion
In a world where fiat money supply is growing, assets priced in those currencies tend to rise in value—reflecting currency depreciation. Since its inception, Bitcoin has shown extreme sensitivity to these macro shifts.
There is a strong historical correlation between the global M2 money supply—aggregated from the US, EU, China, Japan, the UK, Canada, Australia, and Russia—and the price of BTC in USD.
US Dollar Supply
Contrary to popular belief, the Federal Reserve does not have absolute control over the dollar supply. Organic economic factors such as credit creation and the velocity of money play major roles. The Fed attempts to influence these through monetary policy.
A strong economy can even lead to money supply growth and rising asset prices during a rate-hiking cycle. As of April, US M2 growth has turned positive again. Since the July FOMC meeting, the Fed’s focus has shifted toward preventing labor market softening, indicating a tolerance for continued M2 expansion.
This dynamic mirrors the 2016–2017 bull market and appears to be repeating in the current cycle.
RMB, Euro, and Yen Supply
The US, China, and the EU together account for 75% of the aggregated global M2. All three are currently leaning toward monetary easing, suggesting a phase of synchronized liquidity expansion is approaching.
Japan remains a variable, but the new Prime Minister has called on the Bank of Japan to adopt a "more cautious approach."
Since the "growth scare" in the summer of 2024, markets have responded positively to strong economic data. The narrative has shifted from "good news is bad news" to "good news is good news."
The People’s Bank of China has announced a series of stimulus measures to counter a three-year economic slowdown, contributing to a recent strong rebound in Chinese equities. The European Central Bank also cut rates in September, and futures markets are pricing in a continued easing cycle into 2025.
Reduced Regulatory Uncertainty
Regardless of whether Trump or Harris wins the upcoming election, regulatory risks for cryptocurrency are expected to be lower than they were under the Biden administration—though the degree of improvement may vary.
Under a Trump administration, we could expect:
- The resignation of SEC Chair Gary Gensler
- Repeal of SAB121
- An end to initiatives resembling "Operation Choke Point 2.0"
- Fewer forced sales of confiscated crypto assets
- Greater support for strategic Bitcoin reserve bills
Under a Harris administration:
- Gensler would still likely be replaced
- Other policies are less clear, but there are indications Harris may distance herself from the Biden-era approach
While not ideal, the regulatory environment is likely to improve. The expected value of the election outcome is net positive for the crypto market.
The elimination of uncertainty alone could trigger a short-term rally, provided the election result is uncontested.
Analysts have even scored the potential regulatory positivity of each candidate, with both Trump (90) and Harris (56) scoring higher than Biden’s 50. The expected value for the market rises from 50 to 74.
Low Market Expectations
There are few signs of a market bubble. Several metrics indicate sentiment is far from euphoric:
- The market cap share of altcoins (excluding the top 10) is at post-FTX collapse levels. From current levels, it would need to grow about 80% to reach previous cycle highs.
- The ratio of Bitcoin perpetual open interest to market cap is near the lower end of its range.
- The Coinbase app is ranked around 430th in app stores.
- Google search trends for "Bitcoin" are at post-FTX lows.
Conclusion: A Critical Juncture
We appear to be at a pivotal moment due to:
- Dovish monetary policy in two of the three largest economies (China and the EU)
- A US willingness to allow organic liquidity expansion to counter a growth slowdown
- A positively anticipated political event less than a month away
- A notable absence of bubble-like market conditions
👉 Explore real-time market analysis
Frequently Asked Questions
What primarily drives a Bitcoin bull market after a halving?
While the halving reduces new supply and contributes to scarcity, it is often not the sole driver. In the current cycle, the approval of Bitcoin ETFs and shifting regulatory expectations are playing equally important, if not larger, roles in attracting institutional capital and boosting market confidence.
Does the price only go up after a halving?
No, it does not. The market often experiences a "cooling-off" period for several months post-halving where price action can be muted or volatile. Historically, the strongest bull phases have begun 6 to 12 months after the halving event.
How should one invest around a halving?
A long-term, dollar-cost averaging strategy is often recommended to mitigate timing risk. Traders also monitor key technical support and resistance levels. Diversifying across asset classes and paying attention to market sentiment indicators can also help manage risk.
What is the typical duration of a post-halving bull market?
Historically, bull markets following a halving have lasted between 12 to 18 months. However, the specific duration and intensity can vary significantly based on broader macroeconomic conditions and levels of institutional adoption.
Which factors beyond price are affected by the halving?
The halving directly impacts miners by slashing their block rewards in half, which can strain profitability and lead to short-term selling pressure from miners covering operational costs. Conversely, the supply shock can attract more institutional investors through products like ETFs, creating a more stable long-term demand base.
Where should investors focus their attention post-halving?
Beyond Bitcoin’s price, it’s valuable to monitor the broader ecosystem, including mining company health, institutional flow data into ETFs, and regulatory developments. These factors provide a more complete picture of market strength and sustainability.