Bitcoin Risks Deeper Declines With Odds of U.S. Market Crash Rising to 35%

Rising geopolitical tensions and surging oil prices are shaking global markets, though Bitcoin has so far remained relatively steady compared with other risk assets.

The world’s largest cryptocurrency was trading around $67,378 on Monday morning, marking a 1.1% gain over the past 24 hours and leaving it roughly unchanged over the past week—even as broader markets have deteriorated.

Among other major digital assets, Ether climbed 2.3% to $1,981, hovering just below the $2,000 level. BNB rose 1.4% to $624, while Dogecoin gained 1.8% to trade near $0.09. Solana advanced 1.8% to $83.69, though it remains down 1.5% over the past seven days, making it the weakest performer among major cryptocurrencies over that period. XRP was little changed at $1.35, leaving it down about 1% on the week.

Traditional financial markets, however, are showing increasing signs of strain. Futures linked to the S&P 500 fell more than 2% during Asian trading hours. Meanwhile, the CBOE Volatility Index surged to its highest level since the tariff-driven market turbulence seen in April. Oil prices have climbed above $100 per barrel, while the U.S. dollar recently posted its strongest weekly gain in about a year.

Against this backdrop, veteran market strategist Ed Yardeni increased his estimate for the likelihood of a U.S. stock market meltdown this year to 35%, up from 20%. At the same time, he reduced the probability of a market “melt-up” to just 5%.

“The U.S. economy and stock market are stuck between Iran and a hard place,” Yardeni wrote, warning that a prolonged oil shock could complicate the Federal Reserve’s policy path by raising the risk of both higher inflation and increasing unemployment.

In periods of severe market stress, investors often retreat from volatile assets and move capital into safer options such as cash, U.S. Treasuries, or the dollar. Despite its reputation as a hedge, bitcoin has historically declined alongside equities during major risk-off episodes since 2020.

Still, analysts argue that bitcoin’s relationship with stocks is not as strong as it may appear. In a recent note, Greg Cipolaro explained that the cryptocurrency’s recent tendency to move in tandem with U.S. software stocks likely reflects shared exposure to the current macroeconomic environment rather than a deeper structural connection.

According to Cipolaro, roughly 25% of bitcoin’s price movements can be attributed to its correlation with equities, while the remaining 75% is driven by factors outside traditional stock markets.

The broader outlook for equities remains fragile. A global equity index tracked by MSCI fell 3.7% last week, with Asian markets suffering the steepest declines. South Korea’s stock market has yet to fully recover from a record two-day plunge, while hedge funds have been increasing short bets on U.S. equity ETFs. At the same time, yields on benchmark 10-year U.S. Treasuries rose six basis points as traders priced in higher inflation driven by the surge in oil prices.

U.S. stocks have so far fared better than many global peers. The S&P 500 declined about 2% last week, partly because the country’s relative energy independence offers more protection from oil shocks compared with markets in Asia and Europe.

However, the more than 2% drop in stock futures early Monday suggests that this buffer may be starting to fade.