Bitcoin is now front-running the Fed rather than reacting to it, and this dynamic is captured by the phrase Bitcoin front-running the Fed due to spot ETFs. A pivotal event was the U.S. Securities and Exchange Commission’s approval of spot bitcoin ETFs in January 2024. Since 2024, Bitcoin’s correlation with the Global Easing Breadth Index, which tracks 41 central banks, has shifted strongly negative, marking a strong change from its previously mildly positive link.
Spot bitcoin ETFs were formally approved by the U.S. Securities and Exchange Commission in January 2024. The Global Easing Breadth Index, which tracks monetary easing policies across 41 central banks worldwide, had a mildly positive correlation with Bitcoin before that approval, with BTC tending to follow global easing cycles by several months. Since the approval of spot bitcoin ETFs in 2024, Bitcoin’s correlation with the Global Easing Breadth Index has turned strongly negative. This marks a clear reversal in the sign of the relationship between Bitcoin and that global easing indicator.
The negative correlation that has emerged since 2024 is nearly three times stronger than the prior mildly positive link. Binance Research stated: “As a result, BTC may have evolved from a macro ‘lagging receiver’ to a ‘leading pricer’.” These observed shifts have taken place since the SEC approved spot bitcoin ETFs in January 2024.
Markets are grappling with fears of stagflation tied to rising oil prices and to geopolitical tensions related to the war in the Middle East, and these factors are described in reporting as shaping the current macroeconomic environment.
Rising oil prices are referenced as contributing to inflationary pressure while geopolitical tensions in the Middle East are noted alongside energy-market strains. Rate expectations have swung from forecasts that projected cuts toward scenarios that include possible rate hikes, reflecting shifts in market expectations.
The combination of stagflation concerns, oil-price pressures, Middle East geopolitical tensions and changing rate expectations depicts an uncertain macroeconomic landscape for markets.
Bitcoin’s market behavior has shifted from a lagging responder to a leading pricer in relation to central-bank easing cycles, a change that followed the U.S. Securities and Exchange Commission’s approval of spot bitcoin ETFs in January 2024 and is reflected in a reversal to a strongly negative correlation with the Global Easing Breadth Index. The macroeconomic backdrop is complex and evolving, characterized by reported stagflation fears tied to rising oil prices, geopolitical tensions related to the war in the Middle East, and rate expectations that have swung from projected cuts toward possible hikes.
