A Turning Point in Sight: Signs That Bull Markets Follow Predictable Cycles

When we examine the history of bull and bear markets, certain patterns emerge with remarkable consistency. The current market conditions are no exception. Just as the British Empire learned through costly tariff policies in the 1930s, the decisions made today will shape tomorrow’s economic landscape. The UK’s Import Duties Act of 1932, which raised tariffs by 10-33%, preceded its economic decline—while the US rose. Today, as America implements similar protectionist measures, the question becomes: will history repeat itself?

The Economic Crossroads: Interest Rate Expectations vs. Reality

The Federal Reserve has maintained a 2% inflation target as its cornerstone, yet current data tells a more complex story. Last September’s unexpected 50 basis point cut occurred when inflation sat at 2.4% and core CPI at 3.3%. Today’s figures show inflation at 2.7% and core CPI at 3.1%—still elevated. While market forecasters largely expect a rate cut, the economic fundamentals don’t clearly support one. If no cut materializes, the market faces significant headwinds.

Bitcoin and US equities currently price in optimistic scenarios, yet this rally may prove premature. The UBS analysis suggests the S&P could retract to 5900 before year-end recovery to 6100, with potential growth to 6600 by 2026. These projections acknowledge we may be in the final phase of the current uptrend.

Corporate Profitability Under Pressure

Nvidia’s situation exemplifies the underlying challenge. The company agreed to pay 15% of revenue for China export licenses—a significant drag on earnings. Recent quarterly reports reveal the slowdown: year-over-year growth fell from 77.94% in Q4 2024 to 69.18% in Q1 2025. Further compression is likely after this licensing arrangement.

Tesla and similar mega-cap firms show mixed results, but the trajectory is troubling. Berkshire Hathaway provides the clearest signal: cash reserves have declined, and Warren Buffett hasn’t initiated new stock purchases in six months or approved buybacks in a year. When the world’s most disciplined investor turns cautious, market peaks are often nearby.

The Historical Template: Understanding Bull and Bear Market Cycles

The Securities Act of 1933 and Securities Exchange Act of 1934 created the framework enabling US stock appreciation for nearly a century. Companies repurchased shares at premium prices, effectively distributing returns without formal dividends. Yet this model depends entirely on expanding profits.

When governments impose higher taxes and operational restrictions—mimicking Britain’s 1930s mistakes—corporate earnings compress. Buyback capacity evaporates. The history of bull and bear markets shows that policy-induced profit declines invariably precede market retreats, often severe ones.

The Data Fabrication Question

Conversations with US residents reveal a disconnect: street-level prices for essentials have risen sharply. The poverty count increased from 30 million to 40 million Americans. Yet official PPI and CPI figures suggest stability. This apparent inconsistency raises uncomfortable questions about data integrity and whether the Federal Reserve faces political pressure to cut rates, weaken the dollar, and attract capital inflows.

Powell’s decision point approaches. Historical precedent suggests he may yield, though his recent track record shows occasional independence.

Looking Ahead: What’s Priced In?

Even if September brings a rate cut, the relief will likely prove temporary. US stocks and Bitcoin may spike briefly, but downside risk dominates afterward. The market may have already peaked, with the history of bull and bear markets suggesting we’ve entered the final chapter.

Cryptocurrency implications are significant: stablecoin demand may weaken as dollar strength ebbs. However, assets approved for ETFs—Bitcoin and Ethereum especially—should outperform. An Ethereum breakout above historical highs would signal a new phase.

2026 projections suggest renewed strength, potentially breaking the traditional four-year cycle. Yet 2028 raises concerns: will another financial crisis emerge, as occurred in 1973-74, 1998, and 2008? MicroStrategy’s Bitcoin holdings face expiration in 2027. Industries historically require 20 years to transition from speculation to stability.

The prudent approach: maintain Bitcoin and Ethereum core positions, watch for regulatory-approved cryptocurrencies, and remember that understanding the history of bull and bear markets teaches caution before euphoria.