The Halving as a Comforting Illusion

Ran Neuner, host of Crypto Insider, has challenged the prevalent notion of the four-year Bitcoin halving cycle, suggesting it's a comforting but ultimately inaccurate narrative. He argues that while Bitcoin has historically topped around the post-halving year and experienced significant drawdowns, this predictable pattern was based on a limited sample size of just three cycles. This limited data led to the creation of a seemingly predictable market, but Neuner posits that it was not the fundamental driver of price increases.

Neuner's research, which integrated macro, liquidity, equity, and political data into a single model, revealed that the halving played only a minor role. He asserts that the significant price increases in Bitcoin (BTC) were driven by a much larger, overarching factor that has been present in previous cycles but is yet to fully manifest in the current one.

Global Liquidity as the True Cycle Driver

The dominant force Neuner identifies is quantitative easing and the expansion of global money supply. He illustrates this by referencing past bull markets: after the late 2012 halving, Bitcoin's surge from $10 to $1,250 coincided with the Federal Reserve injecting substantial liquidity. Conversely, as the Fed reduced and ended quantitative easing, Bitcoin experienced a significant drawdown, a period Neuner links to liquidity withdrawal rather than the halving cycle itself.

This pattern, he explains, repeated in 2017 when Bitcoin rose from approximately $1,000 to $20,000 amid large bond-buying programs from the European Central Bank, the Bank of Japan, and a significant credit impulse from China. The rally during the Covid era, which saw Bitcoin ascend from $4,000 to $69,000, followed what Neuner describes as the largest global liquidity injection in financial history, with the Fed alone increasing its balance sheet by over $5 trillion, supported by similar actions from other major central banks.

PMI, Institutions, and the Real Economic Clock

Neuner anchors his argument with the global Purchasing Managers' Index (PMI), a key metric for economic expansion or contraction. He observes that when PMI bottoms out and rises above 50, liquidity typically returns, and Bitcoin finds a floor. Readings above 55 have historically marked the beginning of significant bull runs, with levels around 60 coinciding with the "altcoin super cycle." In both the 2017 and 2020 cycles, these PMI thresholds were crossed concurrently with central bank balance sheet expansion and substantial crypto market growth.

Neuner contends that in the current cycle, the Federal Reserve's actions and the PMI have not aligned with the halving schedule. For the past two years, the Fed's quantitative tightening and a stagnant or slightly declining PMI have suppressed what should have been a bull market. This decoupling, he argues, explains why Bitcoin has not experienced the expected gains despite the narrative surrounding another halving, leaving traders fixated on an outdated calendar.

A Warning to Retail Sellers

Neuner issues a stark warning to retail investors: "We have never entered a bear market in a period where liquidity is expanding. Never, not once in history." With the Federal Reserve indicating an end to tightening, anticipating lower interest rates, and a eventual return to quantitative easing, Neuner expects the PMI to surge and institutional investors to shift decisively to a "risk on" posture. He emphasizes that institutional leaders like Larry Fink are not guided by the four-year cycle but are keenly focused on liquidity, the Fed's balance sheet, and the PMI.

He frames the current market pullback as a potential trap for retail investors. Selling out of fear of a "four-year cycle ghost" could mean offloading assets at the bottom, just as institutional buyers are preparing to enter as liquidity begins to expand. Neuner concludes that the four-year cycle was a falsehood and that the current cycle has not yet commenced.