The Bitcoin Layer

The Bitcoin Layer

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The Bitcoin Layer
The Bitcoin Layer
Bitcoin's next halving could converge with the Fed's next easing cycle
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Bitcoin's next halving could converge with the Fed's next easing cycle

More numerator, less denominator, next spring.

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Joe Consorti
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Nik Bhatia
May 16, 2023
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The Bitcoin Layer
The Bitcoin Layer
Bitcoin's next halving could converge with the Fed's next easing cycle
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We are 346 days away from Bitcoin’s fourth halving, an event that occurs every 210,000 blocks, when its supply issuance schedule is programmatically cut in half. On the macro side of the coin, credit contraction and economic deterioration are settling in which will warrant the Fed to start easing up policy. We believe that given the totality of bank, credit, and economic data, that day will come before the end of the year, and our confidence is even greater that it will come within 365 days.

The Fed will shift from tightening to easing and reignite risk-taking animal spirits, right around the same time the issuance of the world’s highest-beta risk asset declines. As one money supply expands, another one grows more scarce.

We cover bitcoin through a global macro lens, and the time is swiftly approaching when two cycle-shifting events spanning these universes might converge, marking the beginning of the next major bull market with rocket fuel.


Today’s topics

  • Bitcoin’s 3rd halving happened 57 days after the Fed started easing in March 2020

  • The order of effects of Fed easing

  • A timeline of the credit contraction and economic deterioration so far

  • Extrapolating when the Fed could shift gears

  • Bitcoin’s halving is a boon for its price, Fed easing only adds more rocket fuel

  • Late-2023 into early-2024 is the time to look out for


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The last bitcoin halving uncannily aligned with the Fed’s emergency easing in March 2020. Just 57 days after the Fed expanded the monetary base and slashed rates to zero, the Bitcoin protocol programmatically reduced the rate of expansion of its own monetary base by 50% to 6.25 bitcoin every 10 minutes:

With the two converging within weeks of one another in 2020, could such an event happen again?

One part of our question is already answered, we know with certainty that the Bitcoin protocol will halve its issuance schedule next April, plus or minus a week or two depending on hash rate. That just leaves one question, what impetus causes the Fed to reverse course, and on what timeline does this have the highest probability of occurring?

The Fed eases when economic deterioration reaches a certain level, a process that is well underway, as the financial and economic dominoes have already started falling.

Order of effects for Fed easing

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