The relationship between the cycles of Bitcoin and the monetary policy of the Federal Reserve (Fed) has been a topic of great interest in the financial market. Let's analyze each BTC cycle and see in which of them the asset appreciated even without interest rate cuts.
🔄 The Cycles of Bitcoin and the Fed's Interest Rate Policy
Bitcoin goes through cycles of approximately 4 years, marked by halvings (the reduction in the issuance of new BTCs). These cycles can be analyzed in relation to the US interest rate to understand how the asset reacted at different times.
📌 1st Cycle (2009 – 2013) → Monetary Expansion (Interest Rates at 0%)
- Halving: November 2012
- Monetary Policy: After the 2008 crisis, the Fed kept interest rates at 0% and implemented QE (quantitative easing) to stimulate the economy.
- Impact on Bitcoin: BTC went from cents to about $12 at the end of 2012 and $1,100 at the end of 2013.
- Conclusion: Bitcoin appreciated, but this cycle occurred under low interest rates and high liquidity, different from the current scenario.
-l 📌 2nd Cycle (2013 – 2017) → Rise of BTC Even Without Interest Rate Cuts
- Halving: July 2016
- Monetary Policy:
- The Fed ended QE in 2014.
- Kept interest rates between 0-0.25% until 2015 and began to raise them in December 2015.
- Bitcoin appreciated even with the Fed raising rates.
- Impact on Bitcoin:
- BTC fell after the 2013-14 rise, but strongly recovered between 2015 and 2016, before the halving.
- Went from about $200 (Jan/2015) to $1,000 at the end of 2017.
- Conclusion: Bitcoin rose even without interest rate cuts, as the market anticipated a new bullish cycle before the halving.
📌 3rd Cycle (2017 – 2021) → Rose Even with High Rates (2017)
- Halving: May 2020
- Monetary Policy:
- The Fed raised interest rates between 2016 and 2018, reaching 2.5% in 2018.
- The Fed only cut rates in 2019, after the S&P 500 crash in 2018.
- Impact on Bitcoin:
- BTC went from $1,000 to $20,000 in 2017 – strong appreciation even with rising rates.
- However, after 2018, BTC fell along with other risk assets.
- Conclusion: Bitcoin rose strongly even without interest rate cuts, driven by hype and growth in the crypto market.
📌 4th Cycle (2020 – 2025) → Rose with Liquidity and Fell with High Rates
- Halving: May 2020
- Monetary Policy:
- The Fed cut interest rates to 0% in 2020 and injected liquidity during the pandemic.
- In 2022, started raising interest rates aggressively.
- Impact on Bitcoin:
- With the monetary tightening in 2022, it fell to $15,500 (Nov/2022).
- Conclusion: This cycle was highly influenced by global liquidity and interest rates. When the Fed started raising rates. However, the past shows that the cycle is sovereign.
🔍 Conclusion: Can Bitcoin rise without interest rate cuts?
Cycles in which BTC rose even without interest rate cuts:
✅ 2015-2016 → BTC rose from $200 to $1,000 before the halving, even without cuts.
✅ 2017 → BTC rose from $1,000 to $20,000, even with rising interest rates.
What does this mean for 2024?
- The current scenario resembles the cycle of 2015-2017, where BTC started to rise before the halving even without Fed cuts.
- Bitcoin can appreciate based on the anticipation of the halving and institutional flow, even if the Fed has not yet cut rates.
📊 Expectations for 2024 and 2025
🔹 Short-term (before the halving - April 2024): Speculative rise may continue.
🔹 Medium term (post-halving - 2024/2025): If the Fed cuts rates in the second half of 2025, BTC may enter a super bullish cycle.
🔹 Risk: If inflation persists and the Fed holds off on cuts, BTC may experience corrections along the way.
💡 Final summary: Bitcoin has a history of rising even without interest rate cuts, especially close to the halving. However, if rates remain high for a long time, the market may experience temporary corrections.
If you want, I can delve deeper into possible targets for BTC in this cycle! 🚀