According to research from asset management firm Bitwise, Bitcoin has already absorbed the effects of tightening monetary policy, leaving equities more exposed to the latest macroeconomic shocks. With Bitcoin down 23.7 percent this year and slipping below $70,000, analysts point to the drop as a noteworthy indicator of shifting market risk perceptions.
Macro developments have diverging impacts on Bitcoin and equities
In recent weeks, rising tensions between the United States and Iran, particularly around the Strait of Hormuz, have led to disruptions in supply and increased geopolitical risk, which in turn have pushed energy prices higher. The resulting surge in oil and natural gas prices has fueled expectations of rising inflation. Earlier in the year, many investors were confident that the U.S. Federal Reserve would lower interest rates; now, however, those hopes have given way to uncertainty. Market-based platforms like Polymarket and Kalshi now show that what was seen as a near-certainty of a rate cut has become doubtful, with the probability of no rate reduction this year rising to 40 percent.
Bitwise senior research analyst Luke Deans emphasized the close link between energy prices and inflation, noting that the latest increases have meaningfully shifted policy expectations. Deans underscored that anticipated interest rate cuts for the year have nearly disappeared from markets’ pricing models.
Luke Deans said, “There’s a strong link between energy prices and inflation forecasts. Recent gains have sparked a notable shift in monetary policy pricing, and most expected rate cuts for the year have essentially been priced out in favor of tighter policy.”
Bitcoin stands out in market dynamics
While the S&P 500 index has fallen about 8 percent over the past month, Bitwise argues that Bitcoin had already factored in these risks earlier. Since October 2025, Bitcoin has been in a declining trend, distinguishing itself as an asset that reacts swiftly to changes in liquidity and investor risk appetite. Deans highlighted that Bitcoin has historically responded more rapidly to macroeconomic developments compared to traditional assets, often reflecting tighter financial conditions ahead of the curve.
Deans explained, “Bitcoin, as a highly sensitive and internally driven asset, tends to adjust earlier to shifts in risk sentiment. This suggests digital assets often price in tighter conditions before conventional assets do.”
One key indicator, the Mayer Multiple—which tracks Bitcoin’s spot price relative to its 200-day average—has been lingering in the lower bounds of its historical range since January. Deans interprets this as evidence that overall expectations in the cryptocurrency market are being reset. By contrast, equities began the year at comparatively elevated valuations and thus have been slower to adjust to evolving macroeconomic conditions.
Deans offered the view that, “Assets that have already sustained substantial declines, alongside reduced leverage and speculative positions, typically become more resilient to downward swings. Markets that remain priced at higher levels without such clearing processes, on the other hand, are more vulnerable when adverse developments arise.”
Bitwise also noted that Bitcoin’s dominance within the cryptocurrency market has strengthened, with a high degree of correlation visible among price movements of alternative coins. According to the company, this pattern signals an increasingly unified market dynamic, where Bitcoin’s price is emerging as the central driver.
