bitcoin It may have already priced in the effects of tighter monetary policy, leaving stocks more exposed to the latest macroeconomic shocks, according to asset manager Bitwise.
The company’s comments come as the cryptocurrency continues to correct below $70,000, a drop of more than 23.7% so far this year.
Geopolitical unrest and energy disruptions, particularly due to the US-Iran conflict choking the Strait of Hormuz, have driven up oil and gas prices in recent weeks. That rise has put pressure on inflation expectations, causing markets to back off their earlier bets on Federal Reserve rate cuts.
On prediction markets including Polymarket and Kalshi, the perceived chances of the Federal Reserve cutting interest rates this year went from near certainty to doubtful. Traders are now pricing in a near 40% chance that rates won’t be cut at all, up from less than 3%.
“Energy prices remain closely tied to inflation expectations,” said Luke Deans, senior research associate at Bitwise. “The recent rise has led to a significant shift in monetary policy pricing, with the Federal Reserve’s previously anticipated rate cuts for the year largely reversing toward expectations of further tightening.”
While stocks have begun to fall in response, with the S&P 500 index losing nearly 8% over the past month, Bitwise maintains that bitcoin has already adjusted. The cryptocurrency has been falling since October 2025, reflecting its liquidity sensitivity and investors’ risk appetite.
“Bitcoin, a highly reflective and liquidity-sensitive asset, typically responds earlier to changes in risk appetite,” Deans said. This suggests that digital assets began to reflect tighter financial conditions than many traditional risk assets. Relative valuation indicators further reinforce this dynamic.”
One indicator, the Mayer Multiple, which compares bitcoin’s spot price to its 200-day average, has been in the lower percentiles of its historical range since January, Deans said. That suggests BTC has already undergone a broad reset of expectations.
By contrast, he said, stocks began the year “at elevated valuation levels and have only recently begun to appreciate as macroeconomic conditions deteriorated.”
“Historically, assets that have suffered substantial valuation compression tend to show reduced downside sensitivity as leverage and speculative positioning are progressively unwound,” Deans told CoinDesk. “Alternatively, markets that trade closer to cyclical highs often retain greater vulnerability to negative macroeconomic catalysts.”
Within cryptocurrencies, bitcoin’s dominance has tightened the market structure. Bitwise noted that correlations between altcoins have increased, pointing to a single-factor environment driven by BTC price.
