Is the next bitcoin bull market the most subdued yet?

Tight money may make the next bitcoin rally slower and steadier.

September saw an almost synchronized tightening of monetary policy: as if in concert, the ECB, the Fed and the Bank of Japan raised benchmark rates. Bitcoin, however, rose — on September 21 the price topped $85,000 for the first time since late January.

The market reaction looks paradoxical. For risk assets, “expensive money” is usually bad news, and digital gold has long moved in step with macro. By that logic, the September decisions by regulators should have pushed the cryptocurrency lower.

Bull phases are typically fueled by cheap credit, which is not on offer now. Crypto investors are used to “setting their clocks” by halvings, but central banks’ timekeepers show a different hour.

Will the classic four-year cycle hold while the leading central banks’ monetary policy sets the rules?

Three hawks

On the evening of September 16, U.S. stocks fell: the S&P 500 approached its lowest since July.

Investors were rattled not by the Fed rate hike, which analysts had accurately predicted — the mood on Wall Street worsened after remarks by Kevin Warsh. At a press conference, the head of the regulator acknowledged that before the September decision the cost of credit had not been restraining the U.S. economy. He indicated that the “expensive money” policy would likely remain in place at least through the end of the year.