Bitcoin Stocks 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, down more than 23.7% year to date.
Geopolitical unrest and energy disruptions, particularly from the U.S.-Iran conflict choking the Strait of Hormuz, have driven up oil and gas prices in recent weeks. The surge put pressure on inflation expectations, forcing markets to reverse previous bets on a Federal Reserve rate cut.
In forecast markets including Polymarket and Kalshi, the perceived odds that the Fed will cut interest rates this year have gone from near certain to doubtful. Traders now estimate 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 the pricing of monetary policy, with previously anticipated Federal Reserve rate cuts for the year largely reversing toward expectations of further tightening.”
While stocks have started to fall in response, with the S&P 500 index losing nearly 8% over the past month, Bitwise says bitcoin has already adjusted. The cryptocurrency has been falling since October 2025, reflecting its sensitivity to liquidity and investors’ appetite for risk.
“Bitcoin, a highly reflexive and liquidity-sensitive asset, generally reacts earlier to changes in risk appetite,” Deans said. This suggests that digital assets began to reflect tighter financial conditions before 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. This suggests that BTC has already undergone a broad revision of expectations.
In contrast, he added, stocks began the year “at elevated valuation levels and only began to revalue more recently as macroeconomic conditions deteriorated.”
“Historically, assets that have undergone substantial valuation compression tend to exhibit reduced downside sensitivity as leverage and speculative positioning are gradually unwound,” Deans told CoinDesk. “Conversely, markets trading closer to cyclical peaks often remain more vulnerable to negative macroeconomic catalysts. »
Within crypto, the dominance of Bitcoin has tightened the market structure. Bitwise noted that correlations between altcoins have increased, indicating a single-factor environment driven by the price of BTC.
