Why a tight valuation range makes bitcoin potentially safer than traditional equities.

Rising oil and gas prices have pushed inflation expectations higher, prompting markets to revise Federal Reserve rate cut bets. Traders now assign nearly a 40% probability that rates will remain unchanged this year, up sharply from under 3% just weeks ago.

Bitcoin BTC $67,482.86 may have already priced in tighter monetary policy, leaving equities more exposed to macroeconomic shocks, according to asset manager Bitwise. The cryptocurrency has corrected below $70,000, down more than 23.7% year-to-date.

Geopolitical tensions and energy disruptions, particularly from the U.S.-Iran conflict around the Strait of Hormuz, have driven oil and gas prices higher, influencing inflation expectations. On prediction markets like Polymarket and Kalshi, traders have drastically lowered the odds of Fed rate cuts this year.

“Energy prices remain closely linked to inflation expectations,” said Luke Deans, senior research associate at Bitwise. “The recent surge has shifted monetary policy pricing, reversing prior expectations of Fed rate cuts toward renewed tightening.”

Equities have started to fall, with the S&P 500 down nearly 8% over the past month. By contrast, bitcoin has been drifting lower since October 2025, reflecting its sensitivity to liquidity and risk appetite. The Mayer Multiple, comparing BTC’s price to its 200-day average, has remained in the lower percentiles since January, suggesting the cryptocurrency has already adjusted.

“Assets that have already undergone valuation compression tend to show lower downside risk,” Deans said. “Markets trading near cyclical highs remain more vulnerable to negative macro shocks.”

Within crypto, bitcoin’s dominance has increased, creating a single-factor market largely driven by BTC’s price, with altcoin correlations rising sharply.

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