Bitcoin’s low valuation cushions it as stocks slip
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- Oil and gas prices surged, raising inflation expectations and prompting traders to price a near‑40% chance that the Fed will not cut rates this year, up from under 3%.
- Bitwise argues that Bitcoin has already incorporated the impact of tighter monetary policy, while equities remain more vulnerable to macro shocks.
- Bitcoin is trading below $70,000, a decline of more than 23.7% year‑to‑date, and has been drifting lower since October 2025 as liquidity dries up.
- S&P 500 has lost nearly 8% over the past month, reflecting the recent equity decline as markets react to higher inflation expectations.
- Mayer Multiple for Bitcoin has been in the lower percentiles of its historical range since January, indicating a broad reset in valuation expectations.
- Altcoins have shown heightened correlation with Bitcoin, suggesting a single‑factor market structure driven by BTC’s price movements.
Why it matters: Investors holding Bitcoin gain a relative buffer as its price has already adjusted to tighter liquidity, while equity holders see heightened vulnerability—S&P 500 down ~8%—as markets price a near‑40% chance of no Fed cuts, meaning stocks may suffer larger losses if inflation persists.
