Remember back in 2012? Bitcoin’s initial halving launched its price to the moon, an astronomical, incredible 7000% increase. Then along came 2016, a “mere” 291%, followed by 2020’s 541%. I mean, sure — everybody was looking forward to history repeating itself in 2024, amirite? Here we sit, half a year after the most recent halving. The price action might be the most boring ever, if we’re being honest. This is not merely a blip on the radar. I believe this example heralds a bigger change.

The usual suspects are being blamed: lack of institutional interest, regulatory uncertainty, and the general "crypto winter" hangover. That's only scratching the surface. The real culprit, in my opinion, is something far bigger: macroeconomic uncertainty. We're not in Kansas anymore, Toto.

Macro Uncertainty's Grip On Bitcoin

The Economic Policy Uncertainty Index (EPU) is one way to quantify worldwide economic jitters. Currently, it is already three times higher than where it was at this same point in prior halving cycles. Let that sink in. We’re speaking about a world affected by commerce wars, inflationary issues, and the ominous shadow of geopolitical instability. Just a year ago, Bitcoin was praised as a new safe haven asset for uncertain economic times. Now, it’s suddenly as exposed as any other asset.

Think about it this way: in the past, Bitcoin was a rebellious teenager, largely immune to the rules and expectations of the adult world. Now, it’s attempting to secure a mortgage. More importantly, it’s compelled to pay attention to interest rates, inflation, and the general economic conditions.

Trump's potential return and his tariff policies are a major contributing factor to this uncertainty. Remember the trade war with China? The resulting market volatility? Bitcoin, in this scenario, is not the safe haven anymore—it’s bait on a broader chessboard.

Trump's Tariffs and Bitcoin's Fate

It’s a little like trying to sail a boat through a hurricane. No matter what you invest in, be it NFTs or Bitcoin, investing can seem daunting. This uncertainty is compounded when global trade is under constant threat from erratic tariffs and political gamesmanship. That’s why Bitcoin is so resilient — it can outlast the storm. Like the storm itself, the next chapter is hard to predict – it’s anyone’s guess which way the wind will end up blowing.

Is Bitcoin just a risk-on asset now? That’s a question we should all be asking ourselves, and working hard to find an answer to.

This notion that the halving just miraculously makes prices skyrocket is, quite honestly, passé. Each time, the amount of new Bitcoin coming into circulation is halved. By increasing supply this reduction should increase demand, pushing prices up. It rests on a shaky assumption that liquidity is always available. Right now, liquidity is tight.

Liquidity Reigns Supreme

Here's a hard truth: liquidity now trumps the halving cycle. But it’s no longer just supply and demand within the Bitcoin ecosystem. It’s those patterns of movement money – in and out of every major global financial center.

So what does that mean for you, the investor? That means you can no longer simply buy up Bitcoin at random every four years and let the law of increasing difficulty make you rich. Here’s how to think beyond the bubble and why you must. Second, you have to know what macroeconomic forces are impacting your region. To do so, you have to think like an economist—or at the very least, learn to read like one.

I'm not ready to write its obituary just yet, but I think it's time to retire it and recognize that Bitcoin is evolving. The 4-year cycle’s failure to coalesce this go around might be a step in Bitcoin’s maturation. This could be a sign that Bitcoin is growing up as an asset. At the same time, it’s becoming more deeply enmeshed with the traditional financial system, and thus more vulnerable to its tidal powers.

Bitcoin's Maturation or Loss of Innocence?

The altcoins underperformance is even more remarkable. A splintered market flooded with an excess of coins makes it harder for any one altcoin to stand out and find success. This challenge is caused by withdrawal of liquidity.

That recent enthusiasm, breaking above US$90,000 is indeed encouraging – a bright spot. Sadly, I fear this is but a stay of execution. That’s merely a momentary ray of hope before the next tide of macroeconomic anxiety washes over.

So, what's the takeaway? Don't blindly follow the old rules. Look at the data. Understand the forces shaping the global economy. And most importantly, be prepared for anything. The future of Bitcoin, much like the future of the world, is more unclear than ever. And that, dear friends, is as scary as it is awesome.

So, what's the takeaway? Don't blindly follow the old rules. Look at the data. Understand the forces shaping the global economy. And most importantly, be prepared for anything. The future of Bitcoin, like the future of the world, is more uncertain than ever. And that, my friends, is both terrifying and exhilarating.

Buckle up.