CoinDesk Data Shows Weak Link Between Bitcoin and Bond Yields

CoinDesk reported on Wednesday that bitcoin has shown little consistent correlation with U.S. Treasury yields over long periods, even as yields jumped to their highest levels since 2007. The analysis challenges the common view that rising borrowing costs are a direct negative factor for the cryptocurrency.

In CoinDesk’s analysis, the 90-day correlation metric for bitcoin’s daily returns versus U.S. 10-year yield changes stood at -0.18. The 180-day correlation was -0.06, while the one-year figure measured -0.03. These numbers point to a relationship close to zero, suggesting bitcoin is not acting as a simple duration asset.

Lacie Zhang, research lead at Bitget Wallet, described the near-zero correlation as a portfolio advantage. “Bitcoin’s near-zero correlation with U.S. Treasury yields is a genuine portfolio advantage because it suggests BTC is not simply trading as a duration or rates asset. Recent data shows the 90-day correlation between Bitcoin’s daily returns and the U.S. 10-year yield at around -0.17, with the relationship at times moving even closer to zero,” she told CoinDesk.

Bitcoin has risen 191% since 2021, reaching a record price of $126,000 last October. During this period, 10-year yields in the U.K. and France rose by more than 500 basis points, while U.S., Australian, German, and Italian yields increased by over 400.

Although long-term correlation is low, short-term bond volatility impacted prices on Wednesday. The U.S. 10-year yield climbed 15 basis points to exceed 5.13%, marking its highest level since 2007. The MOVE Index, a tracker of Treasury volatility, surged 21% to 95 points, its peak since April 1. Bitcoin dropped from $87,200 to $83,500 that day.

Robin Brooks, Senior Fellow at the Brookings Institution, said robust U.S. economic data sparked the shift. “What happened today is that we got strong data for the U.S. and then fiscally vulnerable places caught on fire,” Brooks wrote in a Substack post. The flash S&P Global U.S. Composite PMI for September hit 58.4, increasing from August’s 56.0, which supported the outlook for continued Federal Reserve rate hikes.