Looking at specific historical periods, Bitcoin's YoY returns dwarfed inflation during the 2017 and 2021 bull markets, while showing significant negative returns during bear markets regardless of inflation levels. During the 2022 inflation surge, Bitcoin's negative YoY returns directly contradicted the inflation hedge narrative in the short term, highlighting that market cyclicality and monetary policy may be more immediate price drivers.

Historically, major Fed balance sheet expansions have coincided with significant Bitcoin price movements. The 2020 COVID-19 pandemic response saw the Fed's balance sheet expand dramatically in just months, during which Bitcoin recovered rapidly from its initial crash and began a bull market. Similarly, the 2021 balance sheet expansion coincided with Bitcoin's rise to new all-time highs. Conversely, the 2022 QT (Quantitative Tightening) period aligned with Bitcoin's bear market, suggesting that liquidity conditions significantly impact Bitcoin's price.