U.S. equity markets appear to be in a bubble, with valuations rivalling the 1999 dot-com peak. The current P/E ratio sits at 40.5x, and the market cap-to-GDP ratio stands at about 230%, roughly 77% above its long-run baseline. Some describe a currency depreciation trade—the decline in the dollar’s purchasing power and the inflationary pressures used to digest global debt—but the case is not universally clear-cut.
If the trade were a slam-dunk, the line measuring currency-depreciation impact would be flat; instead, it has risen sharply, implying that price growth outpaces money creation by a wide margin. The macro backdrop, uncertainty, inflation, and war intensification underpin rising anxiety, and many still frame BTC as a risky asset rather than a hedge. Bitcoin’s narrative as a potential safe-haven against macro risk and fiat depreciation has not fully settled, leaving room for ongoing price suppression by competing narratives.
As the macro cycle evolves, the 2026 crypto market may hinge on whether this shift toward safety persists or falters. The debate around quantum risk underscores two levels of risk: actual quantum attacks and perception risk, which may keep prices pressured until the risk is resolved. Prediction markets are entering a new phase of mainstream relevance, with institutional capital likely to shape the next cycle.
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