Fidelity Sees Bitcoin Tracking US Bond Yields at Record Strength

what happened

Fidelity Digital Assets notes that the US 10-year Treasury yield recently hit its highest level since Bitcoin launched. Federal debt has passed $40 trillion, and interest payments now exceed Medicare spending, making them the second-largest line in the federal budget.

Fidelity's analysis finds Bitcoin's correlation with the 10-year real US rate, once close to zero, has turned positive and risen above 0.6 this year, the highest on record. Over the past two months Bitcoin rose almost 30%, while the 10-year yield climbed more than 10%. Binance reported the findings, citing ChainCatcher.

The firm argues that mounting government debt, higher borrowing costs and worries about fiscal intervention could make Bitcoin's capped supply of 21 million coins more appealing as a hedge against currency debasement and a portfolio diversifier. The US budget deficit widened to $1.99 trillion in fiscal 2026 from $1.78 trillion a year earlier, the largest since the pandemic.

why it matters

For markets, Bitcoin is moving more in step with government bond yields, so shifts in rate expectations may feed through to crypto prices more strongly. Rising interest costs and weaker corporate tax receipts keep budget pressure in focus despite official pledges to trim spending.

market impact

Bitcoin and crypto assets: a closer link to Treasury yields makes the token more sensitive to rate moves

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instruments