US President Donald Trump took investors by surprise last weekend when he directed his digital asset working group to create a cryptocurrency reserve that includes Bitcoin, Ether, Solana, XRP and Solana. After an epic pump, crypto markets reversed course within 24 hours, leaving Bitcoin on the precipice of a bearish trend reversal. Fear and trepidation gripped the markets, with investors wondering whether the bull market had ended prematurely.
A closer look at the business cycle reveals that the Bitcoin bull (BTC) market is far from dead. Things may be about to heat up once Trump’s trade war chaos gives rise to sensible trade policies with China, Canada and Mexico.
This week’s Crypto Biz newsletter explores Bitcoin through the lens of the business cycle and chronicles the market’s reaction to a multicurrency crypto reserve.
Trump tanks Bitcoin, but there’s a silver lining
Despite favorable regulatory tailwinds for crypto, Trump’s first month in office was disastrous for markets. Bitcoin suffered its worst February in a decade, and altcoins were decimated as Trump’s trade-war threats triggered a flight to safety.
Fear has gripped crypto markets, with analysts and investors wondering whether the Inauguration Day BTC peak of $109,000 was the top for this cycle. However, according to the Manufacturing Purchasing Managers Index (PMI), the peak isn’t even close.
Throughout its history, Bitcoin’s price has closely mirrored the manufacturing PMI, an important proxy for the business cycle. For example, in 2017 and 2021, Bitcoin’s cycle top was roughly aligned with the peak of the manufacturing PMI.
Source: TomasOnMarkets
In January, the manufacturing PMI entered growth territory for the first time in more than two years, signaling that the business cycle was expanding. According to Real Vision founder Raoul Pal, trends in the PMI point to a Bitcoin cycle peak in late 2025 or even early 2026.
Despite the recent volatility, Bitcoin’s bull market likely hasn’t ended yet.
Coinbase, Gemini CEOs lament crypto reserve
Coinbase CEO Brian Armstrong and Gemini CEO Tyler Winklevoss say a crypto reserve that includes anything other than Bitcoin would be a bad idea for the United States.
“Only one digital asset in the world right now meets the bar and that digital asset is Bitcoin,” Gemini’s Tyler Winklevoss said.
Coinbase’s Armstrong agreed, saying, “Just Bitcoin would probably be the best option,” as it is the only “successor to gold.”
Even notorious Bitcoin hater Peter Schiff said he understood BTC’s digital gold thesis but saw no reason to include altcoins in a national crypto reserve.
Source: Peter Schiff
Trump’s Commerce Secretary Howard Lutnick later clarified that the administration would likely treat Bitcoin differently than other assets in the crypto reserve.
Metaplanet buys the dip
Japanese investment firm Metaplanet has added more Bitcoin to its balance sheet, acquiring 497 BTC at an average price of $88,448. Once again, the acquisition sent Metaplanet’s stock soaring, underscoring positive investor sentiment around digital assets. The company now holds 2,888 BTC worth about $251 million. Only a dozen publicly traded companies hold more Bitcoin than Metaplanet, according to industry data.
Metaplanet is known as “Asia’s Strategy,” a reference to Michael Saylor’s business intelligence firm turned Bitcoiin bank. In January, Metaplanet announced plans to raise more than $700 million to fund future Bitcoin purchases.
Bitcoin miners’ post-halving woes
Bitcoin’s extreme volatility has put pressure on public miners, which were already strained by the network’s quadrennial halving event last April. According to JPMorgan, Bitcoin mining stocks collectively plunged 22% in February. The analysis included Riot Platforms, Bitdeer, Marathon Digital and Core Scientific, among others.
Virtually all companies saw their share prices tumble after reporting quarterly earnings in February — even Core Scientific, which reported better-than-expected sales in the final three months of 2024.
Since the Bitcoin halving, miner revenues and gross profits have declined by an average of 46% and 57%, respectively, according to JPMorgan.
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