Asset manager Bitwise suggests bitcoin may have already priced in the effects of tighter monetary policy, leaving stocks more exposed to macroeconomic shocks. The recent surge in oil and gas prices has driven up inflation expectations, prompting markets to adjust their bets on Federal Reserve rate cuts, with traders pricing in a near-40% chance of no rate cuts this year. Bitwise argues that bitcoin has already adjusted to tighter financial conditions, while equities have only recently begun to fall, making stocks more vulnerable to negative macro catalysts.
“Energy prices remain closely linked to inflation expectations,” said Luke Deans, senior research associate at Bitwise. “The recent surge has led to a meaningful shift in monetary policy pricing, with previously anticipated Federal Reserve rate cuts for the year largely reversing toward expectations of renewed tightening.” “Bitcoin, a highly reflexive and liquidity-sensitive asset, typically responds earlier to shifts in risk appetite.” This suggests that digital assets began reflecting tighter financial conditions ahead of many traditional risk assets.
One indicator, the Mayer Multiple, which compares bitcoin’s spot price to its 200-day average, has sat in the lower percentiles of its historical range since January, suggesting BTC has already endured a broad reset in expectations. Within crypto, bitcoin’s dominance has tightened the market structure. Bitwise noted that correlations across altcoins have surged, pointing to a single-factor environment driven by BTC’s price.
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