Bitcoin shows limited link to rising U.S. bond yields as Treasury volatility pressures crypto

Traders Union
All News
Crypto
Bitcoin and bond yields

Highlights

Bitcoin’s 90-day, 180-day, and one-year correlations with U.S. 10-year yields are minus 0.18, minus 0.06, and minus 0.03, indicating negligible structural linkage.
Since 2021, bitcoin rises 191% and hits a record $126,000 last October, while 10-year yields increase over 400 basis points in major economies.
On Wednesday, the MOVE Index surges 21% to 95 and bitcoin drops from $87,200 to $83,500, highlighting the cryptocurrency’s sensitivity to bond market volatility.

Correlation data and recent market moves

As reported by CoinDesk, data analysis shows bitcoin remains largely uncorrelated with government bond yields, challenging the view that higher yields alone are structurally bearish for the cryptocurrency market. The 90-day correlation between bitcoin’s daily returns and moves in the U.S. 10-year yield stands at minus 0.18, while the 180-day and one-year readings are minus 0.06 and minus 0.03, respectively.

That weak relationship extends beyond the U.S., with bitcoin also showing little consistent correlation with yields in other major economies. Bitget Wallet research lead Lacie Zhang says the near-zero correlation suggests bitcoin is not simply trading like a duration or rates-sensitive asset, which could support its role in portfolio diversification.

Bitcoin’s longer-term performance also points to resilience during a period of sharply higher global borrowing costs. The cryptocurrency is up 191% since 2021 and reaches a record $126,000 last October, even as 10-year yields rise by more than 500 basis points in the UK and France and by more than 400 basis points in the U.S., Australia, Germany and Italy over the same period.

Treasury volatility drives near-term risk sentiment

A more immediate risk for bitcoin comes from instability in the bond market rather than the absolute level of yields. When Treasury volatility rises sharply, tighter financial conditions and broader risk aversion can weigh on speculative assets, including crypto.

The MOVE Index, which tracks expected volatility in Treasury notes, jumps 21% to 95 on Wednesday, its highest level since April 1. Bitcoin falls from $87,200 to $83,500 the same day, a move that may reflect both the spike in bond turbulence and a broader pullback after a steep recent rally.

Wednesday’s jump in yields is driven by stronger U.S. economic data rather than fiscal stress. S&P Global’s flash U.S. Composite PMI rises to 58.4 in September from 56.0 in August, its highest reading since July 2021, reinforcing expectations that the Federal Reserve will need to keep raising rates after its September increase of 25 basis points.

Our earlier coverage of the Federal Reserve’s rate-hike outlook highlighted policymakers’ signals that another increase could still be on the table as inflation risks persist and new economic data comes in. We also outlined how the start of a tightening cycle can trigger near-term volatility in U.S. markets, keeping investors highly sensitive to shifts in rates expectations.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.