In a recent discussion on X, business cycle analyst Tomas (@TomasOnMarkets) provided a comprehensive evaluation of the current state of the global economy and the implications for risk assets, particularly Bitcoin. He described the ongoing economic phenomena as a “short and shallow” full business cycle, which he posits began in 2023, peaked in 2024, and is expected to bottom out in early 2025. This brief cycle, according to Tomas, has been somewhat obscured by the challenges posed by a weak Chinese economy and a consistently strengthening dollar.
Tomas conveys, “The general gist of the theory was that we saw an abnormal, ‘short and shallow’ full business cycle over recent years that suppressed traditional PMI measures both in the US and globally.”
His analysis is informed by four crucial real-time indicators 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 synthesizing these individual measures into rolling yearly z-scores, he developed an “equal-weighted composite z-score” known as the Global Economy Index (GEI).
He notes, “You can see clearly here that the GEI was underwhelming to the upside in 2023 and 2024 (didn’t reach the ‘business cycle peaking zone’). And then fell to levels typically correlated with the end of a business cycle in late 2024/early 2025 (‘business cycle troughing zone’).”
This composite measure has previously shown a leading relationship with US Manufacturing PMI data before the disruptive events of 2020. His analysis indicates that, despite the pandemic and subsequent central bank interventions breaking this pattern, the recent rebound in the GEI could signify the onset of a new business cycle, potentially peaking around late 2026 or 2027. “Based on historical precedent,” he asserts, “this new business cycle could reasonably be expected to peak around late 2026/2027.”
Tomas further discusses the relationship between the GEI, equities, and PMIs, stating, the stock market typically leads business survey measures but lags the GEI. He explains that this interrelationship reflects the stock market’s positioning amid business cycles. Notably, he remarks, “The S&P 500 has now hit what would historically be an acceptable ‘end of business cycle bottoming level.’”
The Implications For Bitcoin
However, Bitcoin emerges as an unpredictable variable in this context. Tomas recognizes the usual leading-lagging relationships may not apply to Bitcoin as they do to other risk assets. “The piece of the jigsaw that doesn’t seem to fit at all (by historical precedent) is Bitcoin,” he observes.
While Bitcoin has so far resisted traditional end-of-business cycle drawdowns, Tomas speculates whether it has matured into a less volatile asset, potentially influenced by ETFs and rising institutional interest. However, he leaves open the possibility that Bitcoin may simply be lagging behind the stock market. He warns that if Bitcoin continues its historical ties to the business cycle, it could lead to the disintegration of the “four-year halving cycle” theory for Bitcoin price action.
In his closing remarks, Tomas expresses caution regarding the global economy’s trajectory. If the Global Economy Index fails to sustain its recent uptrend and instead rolls over to new lows, the outlook could become increasingly pessimistic, particularly if trade tariffs exacerbate existing headwinds. His observations on the rebound in commodities such as copper and shipping rates hint that such recoveries may not be as strong as they seem.
The crucial takeaway from his analysis is that equities and the broader business cycle are visibly nearing their late stages. If Tomas’s predictions hold, a new cycle could soon commence, potentially deferring any significant Bitcoin price peaks until late 2026 or even 2027, questioning the sustained relevance of the existing halving cycle paradigm.
At the time of writing, Bitcoin is trading at $79,428.
