Bitcoin may have already priced in the effects of tighter monetary policy, leaving stocks more exposed to recent macroeconomic shocks, according to asset manager Bitwise.
The firm’s comments come as the cryptocurrency continues to correct below $70,000, down more than 23.7% year-to-date.
Geopolitical turmoil and energy disruptions, particularly from the US-Iran conflict strangling the Strait of Hormuz, have driven up oil and gas prices in recent weeks. That increase has put pressure on inflation expectations, prompting markets to back off earlier bets on rate cuts by the Federal Reserve.
On prediction markets, including Polymarket and Kalshi, the perceived odds of the Fed cutting rates this year went from almost certain to doubtful. Traders are now pricing in an almost 40% chance of rates not being cut at all, up from less than 3%.
“Energy prices remain closely linked to inflation expectations,” said Luke Deans, senior research associate at Bitwise. “The recent increase has led to a meaningful shift in monetary policy pricing, with previously expected interest rate cuts from the Federal Reserve for the year largely reversing expectations of renewed tightening.”
While stocks have started to fall in response, with the S&P 500 index losing nearly 8% over the past month, Bitwise claims that bitcoin has already adjusted. The cryptocurrency has been in decline since October 2025, reflecting its sensitivity to liquidity and investors’ risk appetite.
“Bitcoin, a highly reflexive and liquidity-sensitive asset, typically responds earlier to shifts in risk appetite,” Deans said. This suggests that digital assets began to reflect tighter economic conditions ahead of many traditional risk assets. Relative valuation indicators further reinforce this dynamic.”
An indicator, the Mayer Multiple, which compares bitcoin’s spot price to its 200-day moving average, has been sitting in the lower percentiles of its historical range since January, Deans said. This suggests that BTC has already endured a broad reset in expectations.
In contrast, he said stocks entered the year “at elevated valuation levels and have only recently begun to reverse course as macro conditions worsened.”
“Historically, assets that have undergone significant valuation compression tend to exhibit reduced downside sensitivity as leverage and speculative positioning gradually unwind,” Deans told CoinDesk. “Alternatively, markets trading closer to cyclical highs often retain greater vulnerability to adverse macro catalysts.”
In crypto, bitcoin’s dominance has tightened the market structure. Bitwise noted that correlations across altcoins have increased, pointing to a single-factor environment driven by BTC’s price.
