Are markets predictable? What connects Benner, the S&P 500, and Bitcoin?
Everything in life is cyclical – the seasons change, the phases of the moon change, as do our moods. As Mark Twain said, history does not repeat itself, but "it rhymes." Sometimes it seems that what is happening now has happened before – the same emotions, the same reactions, the same market fluctuations. On the stock exchange, this may seem chaotic, full of unpredictable jumps and drops, but looking at it from a broader perspective, one can see a certain regularity, certain patterns that repeat over the years. It is these cycles – both short-term and long-term – that are one of the key elements that govern financial markets.
In this context, it is worth taking a look at the Benner cycle and its impact on the S&P 500, as well as seeing how it correlates with Bitcoin – which, although it sometimes follows traditional markets, is gaining increasing independence.
The Benner cycle is a theory developed by Samuel Benner in the 19th century, which states that there are certain regularities in the economy and financial markets – ups and downs that repeat at predictable intervals. Benner noted that there are periods of "good times" when prices rise, and "hard times" when prices fall. Based on this theory, he tried to predict what trends would look like in the markets, including, for example, on the stock exchange, and more specifically on the S&P 500 index. According to the Benner cycle, in so-called "good years," the S&P 500 tends to achieve higher results – averaging about 11% profit per year, while in "bad years," this profit is significantly lower – about 6%. But it is worth remembering that this is just a theory, as in reality, many different factors influence the markets – from politics to economic crises, so everything can change.
As for the relationship between the S&P 500 and Bitcoin, the situation is a bit more complicated. In the past – for example, in the years 2019–2021 – Bitcoin and the S&P 500 were practically not correlated. Their prices moved independently of each other, suggesting that Bitcoin could be treated as a separate asset. However, in 2022, the correlation between Bitcoin and the S&P 500 increased. This meant that both of these asset classes began to respond to market changes in a similar way. So if the S&P 500 was rising or falling, Bitcoin often followed it. In 2024, however, the correlation dropped again – this time to about 19%. What does this mean? That Bitcoin is becoming increasingly independent of traditional stock markets, making it an increasingly interesting asset for investors looking to diversify their portfolios.
The Benner cycle is an interesting theory, but it does not always hold up in practice. Meanwhile, the correlation between the S&P 500 and Bitcoin changes depending on market conditions, but it is becoming increasingly clear that Bitcoin operates on its own terms.
Everything in life is cyclical – the seasons change, the phases of the moon change, as do our moods. As Mark Twain said, history does not repeat itself, but "it rhymes." Sometimes it seems that what is happening now has happened before – the same emotions, the same reactions, the same market fluctuations. On the stock exchange, this may seem chaotic, full of unpredictable jumps and drops, but looking at it from a broader perspective, one can see a certain regularity, certain patterns that repeat over the years. It is these cycles – both short-term and long-term – that are one of the key elements that govern financial markets.
In this context, it is worth taking a look at the Benner cycle and its impact on the S&P 500, as well as seeing how it correlates with Bitcoin – which, although it sometimes follows traditional markets, is gaining increasing independence.
The Benner cycle is a theory developed by Samuel Benner in the 19th century, which states that there are certain regularities in the economy and financial markets – ups and downs that repeat at predictable intervals. Benner noted that there are periods of "good times" when prices rise, and "hard times" when prices fall. Based on this theory, he tried to predict what trends would look like in the markets, including, for example, on the stock exchange, and more specifically on the S&P 500 index. According to the Benner cycle, in so-called "good years," the S&P 500 tends to achieve higher results – averaging about 11% profit per year, while in "bad years," this profit is significantly lower – about 6%. But it is worth remembering that this is just a theory, as in reality, many different factors influence the markets – from politics to economic crises, so everything can change.
As for the relationship between the S&P 500 and Bitcoin, the situation is a bit more complicated. In the past – for example, in the years 2019–2021 – Bitcoin and the S&P 500 were practically not correlated. Their prices moved independently of each other, suggesting that Bitcoin could be treated as a separate asset. However, in 2022, the correlation between Bitcoin and the S&P 500 increased. This meant that both of these asset classes began to respond to market changes in a similar way. So if the S&P 500 was rising or falling, Bitcoin often followed it. In 2024, however, the correlation dropped again – this time to about 19%. What does this mean? That Bitcoin is becoming increasingly independent of traditional stock markets, making it an increasingly interesting asset for investors looking to diversify their portfolios.
The Benner cycle is an interesting theory, but it does not always hold up in practice. Meanwhile, the correlation between the S&P 500 and Bitcoin changes depending on market conditions, but it is becoming increasingly clear that Bitcoin operates on its own terms.
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Interesting article and observations. It can also be added that economic sectors also have their cycles:
Interesting article and observations. It can also be added that economic sectors also have their cycles:
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