<p>ETH and BTC are supposed to be competitors. Traders hold both to diversify.</p>



<p>But look at a price chart over any meaningful time period and you will notice something inconvenient: they move together almost constantly. When one climbs, so does the other. When one crashes, it drags the other down.</p>



<p>That is not a coincidence, and it is not manipulation. It is the result of how liquidity pools work.</p>



<p>Richard Heart formalized this observation as Heart&#x27;s Law. The concept has become central to how traders in the PulseChain ecosystem think about price correlation, and it is worth understanding clearly before you read anything else he has written or said.</p>



<h2 class="wp-block-heading tablecontent">Who Is Richard Heart?</h2>



<p>Richard Heart is an internet entrepreneur and crypto promoter who founded Hex in 2019, PulseChain in 2021, and PulseX alongside it. He is known for aggressive self-promotion, long-form YouTube content, and a devoted community following.</p>



<p>He is also controversial. The SEC&#x27;s 2023 complaint alleged he used investor funds to buy luxury goods including a 555-carat black diamond. That complaint was dismissed in April 2025 without a trial.</p>



<p>Heart&#x27;s Law is one of the concepts he popularized. It is a genuine observation about liquidity mechanics in crypto markets, and it stands on its own regardless of how you view Heart personally.</p>



<h2 class="wp-block-heading tablecontent">Richard Heart and the SEC: What Happened</h2>



<p>Richard Heart built three projects under the Heart&#x27;s Law umbrella: Hex, PulseChain, and PulseX. On July 31, 2023, the U.S. Securities and Exchange Commission filed a complaint alleging he sold more than $1 billion in unregistered securities across those three projects. The SEC also alleged that more than 2.3 million ether was deposited into Hex wallet addresses, with large sums misappropriated for personal use.</p>



<p>The case did not go to trial. On April 23, 2025, the SEC moved to dismiss the complaint in full. Heart&#x27;s legal team described it as a complete victory. <a href="https://www.sec.gov/file/comp-pr2023-143" data-type="link" data-id="https://www.sec.gov/file/comp-pr2023-143">The SEC did not refile</a>.</p>



<p>That outcome matters for anyone researching Heart&#x27;s Law today. The dismissal did not formally rule on whether Hex, PulseChain, or PulseX are securities. It simply ended the enforcement action. The regulatory question remains open, even if the specific case is closed.</p>



<h2 class="wp-block-heading tablecontent">What is Heart’s Law?</h2>



<p>Heart&#x27;s Law, as coined by Richard Heart, suggests that the prices of cryptocurrencies tend to move together because they are bonded by liquidity and trading pairs.</p>



<p>Cryptocurrencies such as Bitcoin and Ethereum, for example, often rise and fall simultaneously due to their trading pairs. When one goes up, it pulls the other up because they can be exchanged for each other.</p>



<p>Heart&#x27;s Law challenges the idea that cryptocurrencies move in tandem due to some overarching strategy or manipulation, instead emphasizing the influence of trading liquidity.</p>



<p>Additionally, it accounts for the fact that stablecoins can allow cryptocurrencies to be less correlated. This is because, when more liquidity is sourced from stablecoins, the price movements of other speculative assets can have less of an impact.</p>



<h2 class="wp-block-heading tablecontent">How Liquidity Pool Size Drives Correlation</h2>



<p>Not all trading pairs behave the same way under Heart&#x27;s Law. The size of the shared liquidity pool is the key variable. Here is how the main pairs stack up.</p>





<p style="margin:0 0 16px 0;font-size:16px">
👉 <strong>Quick takeaway:</strong> Heart&#x27;s Law holds most reliably in high-liquidity pairs like ETH/BTC where deep pools dampen volatility and maintain tight price corridors. PLS/PLSX showed similar behavior in its first months post-launch. Small-cap pairs with under $1M liquidity show little to no correlation stability and are where the law breaks down entirely.
</p>
<div style="overflow-x:auto;margin:0 0 24px 0">
  <table style="width:100%;border-collapse:collapse;font-size:16px;line-height:1.5;min-width:950px;border:1px solid #e5e7eb"><thead><tr style="background-color:#f8fafc;text-align:left"><th style="padding:14px 16px;border-bottom:1px solid #e5e7eb">Trading Pair</th><th style="padding:14px 16px;border-bottom:1px solid #e5e7eb">Reported Liquidity</th><th style="padding:14px 16px;border-bottom:1px solid #e5e7eb">Observed Price Range</th><th style="padding:14px 16px;border-bottom:1px solid #e5e7eb">Correlation Strength</th><th style="padding:14px 16px;border-bottom:1px solid #e5e7eb">Best Illustrates</th></tr></thead><tbody><tr><td style="padding:14px 16px;border-bottom:1px solid #e5e7eb">
          <strong>ETH / BTC</strong>
        </td><td style="padding:14px 16px;border-bottom:1px solid #e5e7eb">
          <span style="color:#15803d;font-weight:600">🟢 $100M+ on Uniswap alone</span><br/>
          <span style="color:#15803d;font-weight:600">🏆 Deepest liquidity in table</span>
        </td><td style="padding:14px 16px;border-bottom:1px solid #e5e7eb">
          12 to 20 ETH per BTC<br/>
          <span style="font-size:14px;color:#6b7280">Since May 2021</span>
        </td><td style="padding:14px 16px;border-bottom:1px solid #e5e7eb">
          <span style="color:#15803d;font-weight:600">🟢 Very high</span>
        </td><td style="padding:14px 16px;border-bottom:1px solid #e5e7eb">
          Heart&#x27;s Law at scale<br/>
          <span style="color:#15803d;font-weight:600">🏆 Strongest real-world example</span>
        </td></tr><tr style="background-color:#fcfcfd"><td style="padding:14px 16px;border-bottom:1px solid #e5e7eb">
          <strong>PLS / PLSX</strong>
        </td><td style="padding:14px 16px;border-bottom:1px solid #e5e7eb">
          <span style="color:#15803d;font-weight:600">🟢 $60M+ at launch</span>
        </td><td style="padding:14px 16px;border-bottom:1px solid #e5e7eb">
          0.25 to 0.45 PLS per PLSX<br/>
          <span style="font-size:14px;color:#6b7280">First 8 months post-launch</span>
        </td><td style="padding:14px 16px;border-bottom:1px solid #e5e7eb">
          <span style="color:#15803d;font-weight:600">🟢 High</span>
        </td><td style="padding:14px 16px;border-bottom:1px solid #e5e7eb">Heart&#x27;s Law on a newer chain</td></tr><tr><td style="padding:14px 16px"><strong>Small-Cap Pairs</strong></td><td style="padding:14px 16px">
          <span style="color:#dc2626;font-weight:600">🔴 Typically under $1M</span>
        </td><td style="padding:14px 16px">
          <span style="color:#dc2626;font-weight:600">🔴 Wide, unpredictable swings</span>
        </td><td style="padding:14px 16px">
          <span style="color:#dc2626;font-weight:600">🔴 Low to none</span>
        </td><td style="padding:14px 16px">
          Where Heart&#x27;s Law fails<br/>
          <span style="color:#dc2626;font-weight:600">🔴 Breakdown condition for the law</span>
        </td></tr></tbody></table>
</div>




<p>The pattern is consistent: larger shared liquidity pools produce tighter price correlation. Pairs with under $1 million in shared liquidity can swing independently even if they are technically paired.</p>



<p><em>Note: Liquidity figures for ETH/BTC and PLS/PLSX reflect data cited in the original article. Current pool sizes will differ. Always check live DEX data before making trading decisions.</em></p>



<h2 class="wp-block-heading tablecontent">A Worked Example: What Heart&#x27;s Law Looks Like in Practice</h2>



<p>Suppose you hold 10 ETH and you notice BTC is climbing fast. Should you expect your ETH to follow?</p>



<p>Under Heart&#x27;s Law, the answer depends on where the liquidity sits. Here is the logic:</p>



<ol class="wp-block-list">
<li>The ETH/BTC Uniswap pool holds over $100 million in combined liquidity.</li>



<li>When BTC buyers push BTC&#x27;s price up, arbitrage bots immediately adjust the ETH/BTC ratio in that pool to match the new price.</li>



<li>That arbitrage pressure flows outward to every other pool that includes ETH or BTC.</li>



<li>The result: ETH price tends to rise alongside BTC, not because traders planned it, but because the liquidity mechanics force it.</li>
</ol>



<p>The same logic applies to PLS and PLSX on PulseChain. The $60 million pool between them means a large buy on PLS creates immediate arbitrage pressure on PLSX, pulling it upward.</p>



<p>Where the math breaks down: if a pair has only $500,000 in shared liquidity, a $50,000 buy on one side moves that pair by roughly 10%. That move is large enough to temporarily decouple from the broader market before arbitrage catches up. Thin liquidity means slower, noisier correlation.</p>



<h2 class="wp-block-heading tablecontent">Examples of Heart’s Law </h2>



<h3 class="wp-block-heading tablecontent">Heart’s Law for ETH/BTC</h3>



<p>The best example of Heart’s Law is the price correlation between ETH and BTC.</p>



<p>Since May of 2021, ETH and BTC have moved nearly in lock step, fluctuating between 12 ETH per BTC to 20 ETH per BTC. </p>



<p>The correlation between these cryptocurrencies is due in large part to their bonded liquidity. </p>



<p>At the time this article was written, this single Uniswap pair held over $100 million USD worth of BTC and ETH combined. Liquidity pool sizes shift daily. The figure illustrates the scale of bonded liquidity, not a current snapshot.</p>



<p>This is just one of this trading pair’s dozens of thick liquidity pools on other centralized and decentralized exchanges.</p>



<h3 class="wp-block-heading tablecontent">Heart’s Law for PLS/PLSX</h3>



<p>PulseChain (PLS) and PulseX (PLSX) have seen very similar price action despite competing for the same economic energy.</p>



<p>In the first 8 months of PulseChain&#x27;s existence, PLSX fluctuated between 0.25 and 0.45 PLS per PLSX. That tight range, on a brand-new chain, is a textbook illustration of Heart&#x27;s Law at work. The $60 million in shared liquidity kept the two assets tethered even as broader market sentiment swung.</p>



<p><em>Note: PulseChain and its founder Richard Heart became the subject of an SEC enforcement action in July 2023. That case was dismissed in April 2025. The liquidity figures above reflect early launch data and will have changed. Check live DEX data for current pool sizes before drawing conclusions about present-day correlation strength.</em></p>



<h2 class="wp-block-heading tablecontent">Is Heart’s Law Infallible?</h2>



<p>Heart&#x27;s Law is not a guarantee. It is a strong tendency.</p>



<p>Bonded liquidity creates price pressure, not price locks. ETH and BTC have the deepest mutual liquidity of any pair in crypto, which is why they act as a benchmark for nearly every other asset. A large move in either one sends ripples outward through every pool that touches them.</p>



<p>Three conditions weaken the correlation:</p>



<ol class="wp-block-list">
<li><strong>Thin liquidity</strong>. A pair with $500,000 in shared liquidity can move 10% on a single $50,000 trade before arbitrage catches up. That lag creates temporary decoupling.</li>



<li><strong>Stablecoin dominance</strong>. When a larger share of market liquidity is held in stablecoins rather than volatile assets, the cross-asset price impact shrinks. Stablecoins do not move with the market, so they absorb volatility instead of transmitting it.</li>



<li><strong>Project-specific shocks</strong>. A hack, a regulatory action, or a founder event can override liquidity mechanics entirely. The SEC complaint against Richard Heart in July 2023 is a real example: project-specific news can break the correlation pattern regardless of pool size.</li>
</ol>



<p>Use Heart&#x27;s Law as a directional signal. Do not treat it as a price prediction tool.</p>



<h2 class="wp-block-heading tablecontent">Frequently Asked Questions About Heart&#x27;s Law</h2>



<h5 class="wp-block-heading">What is Heart&#x27;s Law in simple terms?</h5>



<p>It is the observation, made by Richard Heart, that cryptocurrencies sharing large liquidity pools tend to move in price together. The bigger the pool, the tighter the correlation.</p>



<h5 class="wp-block-heading">Who is Richard Heart?</h5>



<p>Richard Heart is the founder of Hex, PulseChain, and PulseX. He is a prominent and polarizing figure in crypto. In July 2023, the SEC filed a complaint against him alleging more than $1 billion in unregistered securities offerings. The case was dismissed in April 2025.</p>



<h5 class="wp-block-heading">What happened to the SEC case against Richard Heart?</h5>



<p>The SEC filed its complaint on July 31, 2023. It alleged that Heart sold unregistered securities through Hex, PulseChain, and PulseX and misappropriated investor funds. On April 23, 2025, the SEC moved to dismiss the case. Heart&#x27;s attorneys described the outcome as a complete victory.</p>



<h5 class="wp-block-heading">Does the SEC dismissal mean Hex, PulseChain, or PulseX are not securities?</h5>



<p>No. The dismissal ended the enforcement action without a ruling on the merits. The question of whether those tokens qualify as securities under U.S. law was not formally decided by a court.</p>



<h5 class="wp-block-heading">Does Heart&#x27;s Law apply to all crypto pairs?</h5>



<p>No. It applies most strongly to pairs with large shared liquidity pools, typically above $10 million. Pairs with thin liquidity can move independently for extended periods before arbitrage forces realignment.</p>



<h5 class="wp-block-heading">Can stablecoins reduce the effect of Heart&#x27;s Law?</h5>



<p>Yes. When a larger share of a market&#x27;s liquidity is sourced from stablecoins rather than volatile assets, the price impact that volatile assets have on each other weakens. Heart&#x27;s Law accounts for this explicitly.</p>

FXRP Collateral on Ethereum: How XRP Entered DeFi via Morpho Blue

Ethereum Holds 26% of All DEX Trading Volume — How Its L2s Split the Rest

Aave On-Chain Lending Market Share: What 47.8% of DeFi Loans Means

What Is Capital Efficiency in DeFi and Why It Matters

What Is Heart's Law? The Liquidity Correlation Concept

Heart's Law says liquidity determines how tightly paired assets track each other. Learn how it works, where it holds, where it breaks down, and what it means for PLS and PLSX.