Why bitcoin's 'compressed' valuation offers reduced downside risk versus stocks
Bitwise suggests Bitcoin's valuation has already priced in tighter monetary policy, offering less downside risk than stocks facing new macro shocks.Summary
Asset manager Bitwise argues that Bitcoin's recent price correction and 'compressed' valuation, indicated by metrics like the Mayer Multiple sitting in lower historical percentiles, suggest it has already absorbed the impact of anticipated tighter monetary policy. This contrasts with equities, which entered the year at elevated valuations and are only now beginning to reprice due to deteriorating macroeconomic conditions, such as rising inflation expectations driven by energy prices and the reduced likelihood of Federal Reserve rate cuts. Because Bitcoin is highly sensitive to liquidity and typically responds earlier to shifts in risk appetite, its prior decline reflects tighter financial conditions, potentially offering reduced downside vulnerability compared to stocks when facing negative macro catalysts.
(Source：CoinDesk)