Fidelity: The correlation between Bitcoin's market value and U.S. Treasury yields has risen to a historic high
Fidelity Digital Assets recently released an analysis stating that the yield on the U.S. 10-year Treasury bond has recently risen to its highest level since the birth of Bitcoin, while the scale of U.S. federal debt has surpassed $40 trillion, with interest expenditures exceeding Medicare, becoming the second-largest expenditure item in the federal budget.Fidelity pointed out that the correlation between Bitcoin and the U.S. 10-year real interest rate has been low for a long time in the past, but has gradually turned positive in recent years, with the correlation rising above 0.6 in 2026, reaching a historic high. Over the past two months, Bitcoin has risen nearly 30%, while the yield on the U.S. 10-year Treasury bond has increased by more than 10% during the same period.Fidelity believes that as government debt rises, financing costs increase, and concerns over fiscal intervention intensify, Bitcoin's fixed supply limit of 21 million coins may enhance its appeal as a potential hedge against currency depreciation and a portfolio diversification tool. If the current trends in debt and interest rates continue, government interest expenditures may even become the largest expenditure item in the federal budget in the future.Data from the U.S. Treasury Department shows that the federal budget deficit for fiscal year 2026 has risen to $1.99 trillion, up from $1.78 trillion in fiscal year 2025, marking the highest level since the pandemic. Despite the Trump administration's commitment to cut spending, military expenditures, Social Security spending, and interest on national debt continue to rise, coupled with a decline in corporate tax revenue, further widening the fiscal deficit.
