In the ever-changing landscape of the cryptocurrency market, a disruptive viewpoint is emerging: Bitcoin has broken free from the influence of its halving cycle and has officially entered the U.S. stock market and the overall economic cycle. Wang Feng, founder of Blueport Interactive, recently tweeted that this trend applies not only to Bitcoin but also to Ethereum and the underlying crypto wave, which is increasingly likely to exhibit a similar trend. If this viewpoint holds, it will fundamentally change our understanding of the operational laws of the cryptocurrency market. Against the backdrop of rising expectations for interest rate cuts by the Federal Reserve and ample market liquidity, the future trends of Bitcoin and Ethereum will be closely linked to the global macroeconomic cycle.
- Bitcoin Breaks Free from the "Halving Cycle": Integrating into the U.S. Stock Market and Overall Economic Cycle
Wang Feng's Viewpoint: On August 24, Wang Feng tweeted that he personally believes Bitcoin has broken free from the influence of its halving cycle and has entered the U.S. stock market and the overall economic cycle. He believes that Ethereum and the underlying crypto wave are also increasingly likely to exhibit a similar trend, but further observation is needed.
Recognition from Traditional Finance: The emergence of this viewpoint coincides with the increasing legitimacy of Bitcoin as an institutional-grade asset and the growing acceptance of it in traditional financial markets.
- Early Stage of the Crypto Cycle: Tom Lee's Judgments and Capital Flows
Rising Proportion of Non-Holders of Crypto Assets: On August 24, Tom Lee posted on X platform that a Morgan Stanley survey shows the proportion of individuals not holding crypto assets is expected to rise to 82% in 2025 (up from 69% in 2024). He believes this increase indicates that we are still in the early stages of the crypto cycle.
ETH Trading Platform Flow Proportion: On August 24, on-chain data analyst Murphy stated that the flow proportion of ETH on trading platforms is calculated based on the dollar value of ETH and BTC inflows/outflows across all trading platforms. On August 15, the flow proportion of ETH reached as high as 48%, marking the highest point of this cycle so far. This ratio indicates that nearly half of the funds entering and exiting trading platforms are ETH, which can also indirectly confirm the current market's high interest in ETH.
ETH/BTC Exchange Rate: Comparing nearly a decade of this data with the ETH/BTC exchange rate curve reveals that the red and blue lines are highly synchronized. When more capital begins to focus on ETH, the exchange rate of ETH strengthens, meaning ETH starts to outperform BTC. Currently, the ETH/BTC exchange rate is only around 0.04, far from the peak of 0.08 in 2021. This suggests that the ETH/BTC exchange rate is still undervalued, and as long as capital maintains its interest, theoretically, there is still room for the current exchange rate to rise.
- The End of the Bull Market? Caution and Strategy Adjustments from Traders
The End of the Bull Market Theory: On August 24, trader Eugene Ng Ah Sio posted on his personal channel that it seems we are at the end of the bull market cycle that began in January 2023—he expects this phase will not last more than a few months, as every marginal buyer globally has, to some extent, turned to and purchased cryptocurrencies, with both Bitcoin and Ethereum now reaching historical highs.
Strategy Adjustments: Eugene's set target for the ETH/BTC exchange rate at 0.04 has been achieved, which for him means that ETH trading has effectively ended. He will no longer adopt an aggressive strategy—no longer engaging in large Martingale momentum trading, shifting his strategy focus from capital accumulation to capital preservation. He may miss out on any subsequent potential wild market movements, but that’s okay, as these fluctuations no longer align with his trading system. He still holds long positions, but the net position size has been significantly reduced. He will use the mNAV indicator of crypto treasury reserve companies as a signal for when to strongly re-enter the market, expecting that when this cycle fully ends, most crypto treasury reserve companies' trading prices will be below 1x mNAV.
- Federal Reserve Policy Shift: Expectations for Rate Cuts and Inflation Pressure
Powell's Yield: On August 24, The Kobeissi Letter released the latest market analysis stating that Federal Reserve Chairman Powell has effectively yielded, and the Fed will cut interest rates in a month, attributing this to a "weak labor market."
Inflation Pressure: Meanwhile, the PPI inflation rate has reached its highest level in three years, and the CPI inflation rate has remained above 2% for 53 consecutive months.
The Fed's Dual Mandate: The Federal Reserve's responsibility is to reduce unemployment and avoid inflation/deflation, which is the Fed's "dual mandate." Since 2021, the Fed has been highly focused on inflation. However, Chairman Powell's speech on Friday marked a significant shift: "Changes in risk balance may require us to adjust our policy stance." In other words, the Fed now believes that the risk of unemployment is greater than that of inflation, which almost confirms that interest rate cuts are imminent.
Conclusion:
Bitcoin has broken free from the influence of its halving cycle and has entered the U.S. stock market and the overall economic cycle, indicating that the cryptocurrency market is moving towards a deeper level of maturity. Against the backdrop of rising expectations for interest rate cuts by the Federal Reserve and ample market liquidity, the future trends of Bitcoin and Ethereum will be closely linked to the global macroeconomic cycle. Although some traders believe the bull market is nearing its end and have adjusted their strategies, Tom Lee's judgments and on-chain data indicate that the crypto cycle is still in its early stages, with sustained high interest in Ethereum. Investors should closely monitor macroeconomic policies and capital flows to seize future development opportunities in the crypto market.
Related Reading: Michael Saylor Hints Strategy Will Buy Bitcoin (BTC) for the Third Consecutive Time in August
Original Article: “Bitcoin Bids Farewell to the Influence of the Halving Cycle, Integrates into the U.S. Stock Market and Macro Economic Cycle”
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