The data proves it: Bitcoin doesn't care about rising bond yields over long-term
Reported by CoinDesk · AI-assisted summary by ChikoCorp AI News Desk
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Summary
CoinDesk reports that Bitcoin has shown little consistent correlation with rising government bond yields over time, challenging the usual narrative that higher yields are bearish for the cryptocurrency. Despite recent volatility in the Treasury market pushing Bitcoin’s price lower in the short term, longer-term data show near-zero correlation between Bitcoin returns and 10-year U.S. Treasury yields. Analysts emphasize that Bitcoin’s lack of correlation with bond yields can be a portfolio diversification advantage.
Why it matters
This development matters because Bitcoin’s independence from bond yield movements suggests it may not be directly impacted by traditional fixed income market dynamics, potentially serving as an alternative asset in investment portfolios. The article does not provide further explanation on the broader market or policy implications of this lack of correlation.
Key context
Rising bond yields typically increase the opportunity cost of holding non-yielding assets like Bitcoin and gold, which could drive investors toward bonds. However, the data analyzed by CoinDesk over several time frames show Bitcoin’s daily returns have a correlation near zero with U.S. 10-year Treasury yields, indicating Bitcoin does not behave like a duration or interest rate-driven asset. Recent spikes in bond market volatility, tracked by the MOVE Index, have caused short-term price fluctuations in Bitcoin.
Key numbers and entities
Bitcoin’s price dipped from $87,200 to $83,500 amid a 21% surge in Treasury market volatility. The U.S. 10-year Treasury yield recently jumped 15 basis points to above 5.13%, its highest since 2007. The 90-day correlation between Bitcoin’s daily returns and the U.S. 10-year yield is reported at −0.18, with longer-term correlations at −0.06 (180-day) and −0.03 (1-year). Lacie Zhang, research lead at Bitget Wallet, and Robin Brooks, Senior Fellow at the Brookings Institution and former chief economist at the IIF, are quoted.
What remains unclear
The source does not clarify how Bitcoin’s lack of correlation with bond yields might influence regulatory approaches or how it could impact investor behavior during future macroeconomic shifts. Additionally, it remains unclear what specific factors drive Bitcoin’s price independently of bond market movements beyond volatility episodes.