[SERIOUS] Could we have it all wrong? What "triggers" the Bitcoin bull market, the halving or the stock market?

One of the most popular views here is that the bull run is triggered by the Bitcoin halving, which "occurs when the reward for mining Bitcoin transactions is cut in half". In this post I will present an alternative hypothesis, namely that the bull run might be triggered by the stock market.

Note that I do not know which hypothesis is correct but consider this an important issue to debate on. If the reason for the bullrun isnt the halving, people's prediction for when the next bull market happens might be entirely off, enabling the big players in this space to "trick" retail into making the wrong investment decisions, similar to how we all expected:

• a blowoff top and 100K; but we got a weird double top at $69k instead
• to never go below all time high; but the price went below all time high anyways
• that Bitcoin would gain a lot of dominance in this bear relative to alts like all the previous bear markets (hello Ben Cowen); but instead Bitcoin dominance is still very weak

None of the things we all expected to happen came true. What if the halving hypothesis is next?

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(1) The halving hypothesis explained

To understand the stock market hypothesis, it is important understand the halving hypothesis. The previous halvings occered on November 28, 2012, July 9, 2016, and May 11, 2020. The next halving is estimated to occur around 25 March 2024.

There is no denying that Bitcoin has pumped after each of the halvings, as shown in the charts below. Light blue vertical lines mark the halving events. Hence, there is a clear association.

The Bitcoin weekly chart (price in dark blue, halvings marked with light blue vertical line)

The price 150 days after the halving is always substantially higher (Cointelegraph)

This is why many people expect the next bull run to start in 2024. Makes sense, right? Because: "the halving of Bitcoin has as its effect and goal to decrease the amount of new Bitcoin generated per block. This means that the supply of new Bitcoin inevitably becomes lower, despite the fact that demand remains virtually unchanged, thus theoretically generating a lower supply, relative to demand."

Or as all the articles say:

An example article expecting Bitcoin to Moon after halving

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(2) The stock market hypothesis explained

I present a second hypothesis, namely that the bull run in crypto is triggered by the stock market, and in particular by the stock market leaving a range and breaking out until new all time highs, which triggers a favorable macro environment for risk-on behavior as the stock market goes into price exploration. Note that others have mentioned similar ideas before but as far as I know not here [but I could be wrong].

Bear with me as I (try to) explain it. Since 1996, the S&P 500 arguably has had three "ranges":

• ~$700 to ~$1500
• ~$1500 to ~$2100
• ~$2100 to $3400

In the picture below, the top of these three ranges is marked by a purple horizontal line. There are three key moments when the S&P 500 breaks out of the existing range into new all time highs and keeps making new highs for quite some time until it hits the top of the next range and starts to consolidate. These three moments are marked with a green vertical line and highlighted with a black circle for clarity.

S&P 500 weekly chart (top of the three ranges marked with purple horizontal line, key breakout moments with a green vertical line + black circle)

If I map these three key breakout moments onto the Bitcoin price chart alongside the halving moments, we get the view in chart below. Again, light blue are the halving moments, purple the moments when the S&P starts price discovery and then keeps making new all time highs afterwards.

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Bitcoin weekly chart (halving in light blue vertical lines, key breakout moments of the S&P 500 in the purple vertical lines)

The S&P breaking the range happens very close to the halving each time and has a similar association with price increases. Everytime it happens around the moment Bitcoin starts to break out into a new range as well. If I would have told you that the purple lines were the halving moments, would you have believed me?

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Some additional arguments for the stock market hypothesis:

• Institutions keep getting a bigger piece of the Bitcoin pie. For institutions, the macro environment is key. Good economic conditions? They will take more risk-on behavior and might acquire Bitcoin. Bad economic conditions? They engage in risk-off behavior and might sell (some of) the Bitcoin. We see this right now (e.g. Tesla).
• Ask yourself, if there is a recession during the next halving in 2024 and stocks are very bearish, do you see Bitcoin pumping? Remember, the correlation between the stock market and Bitcoin has never been higher.
• The impact of the halvings on the block rewards will get lower over time. Its still significant in 2024 but nowhere close the early halvings.
• For the interested people, if you look at when the S&P 500 pauses after a breakout, that is when Bitcoin typically goes sideways or corrects for a longer period of time. I kept this out because it gets too long and complex.

I am really curious of your thoughts. Again. I dont pretend to know what the truth is. But I would like to at least question the halving hypothesis and discuss alternatives.