Insights 
VT 
As the Quarter 4 2025 earnings season kicks off, investors’ eyes are fixed on the scoreboard to see if corporate America can justify the record valuations seen at the end of last year. Heading into Quarter 3, analysts expected S&P 500 earnings to grow by 7.9%.
Corporate America crushed expectations and delivered earnings growth of approximately 13.3%.
While that marked the ninth consecutive quarter of growth, it revealed a crack in the foundation regarding the consumer. Tech giants thrived, but companies exposed to everyday borrowers flashed warning signs.
Forward guidance was cautious, hinting that while the corporate engine is running hot, the fuel of consumer spending might be running low.
However, for the crypto market, the specific earnings-per-share numbers are almost irrelevant. The real signal lies in the macroeconomic ripples these reports create, specifically how they influence the one metric that matters most for digital assets, which is the US Dollar Index (USDX).
The Expectations For A Market Priced For Perfection
According to the latest data from FactSet, the consensus estimate for Q4 2025 earnings growth sits at 8.3%. If realised, this would secure a tenth straight quarter of expansion. Analysts are currently optimistic and project that this momentum will carry into 2026 with double-digit growth expectations of roughly 15%.
However, good news for the stock market is not necessarily good news for crypto. This is where the logic requires a shift away from simple correlations and toward the mechanics of global liquidity.
How The Dollar Controls Crypto Prices
To understand the link between earnings and crypto, we must look at the Federal Reserve’s reaction function.
The primary driver of Bitcoin’s price action over the last cycle has been global liquidity, which is essentially how much cheap money is moving around the system. The gatekeeper of this liquidity is the US Dollar.
If this earnings season delivers a blowout performance where companies report soaring profits and raise their guidance for 2026, it signals that the US economy is accelerating. In this situation, the Federal Reserve loses the incentive to cut interest rates.
Consequently, bond yields would likely rise and make the US Dollar more attractive to global investors. A surging Dollar acts like a vacuum that sucks liquidity out of risk assets. For Bitcoin, which is priced in USD, a strong Dollar often acts as a price cap.
Conversely, the scenario that traditionally ignites a crypto rally is a soft earnings season.
If we see a slight miss in earnings, particularly in the retail and consumer discretionary sectors, it suggests the economy is cooling. This forces the bond market to price in aggressive rate cuts from the Fed to support the economy. When the market anticipates rate cuts, the Dollar typically weakens as yields fall.
A falling Dollar increases the M2 money supply and creates the Goldilocks zone for crypto, which is an economy weak enough to demand liquidity injections but not so weak that it triggers panic.
However, traders must be careful because this logic has a breaking point.
We are currently facing a market with a split personality where stocks rely on growth to go up, while crypto often relies on liquidity to go up.
If earnings soften just enough to worry stock investors, the Fed typically steps in with the medicine of rate cuts. In that specific scenario, stocks might still feel sick from the lack of growth, but crypto rallies on the medicine of new liquidity.
The danger arises if the news becomes too bad. The argument that bad news is good news only holds if the economy is bending rather than breaking. If earnings are disastrous with massive layoffs or collapsing revenue, we are no longer looking at a slowdown but a potential recession.
In a true panic, the promise of future liquidity matters less than immediate safety. Investors will sell everything, including stocks, bonds, gold, and crypto, in a desperate dash for cash. Therefore, crypto bulls should be rooting for a soft landing in earnings, not a crash.
The Verdict
Ultimately, crypto traders should view this earnings season not as a report card on corporate health, but as a barometer for liquidity.
The key is to watch the reaction of the US Dollar immediately after major earnings prints. If the Dollar spikes, the economy is likely too hot, and crypto volatility may remain suppressed.
If the Dollar falls, the liquidity gates are opening, signalling a potential run for Bitcoin. However, if the Dollar spikes while stocks crash simultaneously, it indicates a recession scare where cash becomes the only safe haven.
