Bitcoin has doubled to $86,000 since late 2023 despite the 10-year Treasury yield climbing 135 basis points to 5.23%, marking a significant shift from the strong inverse correlation seen during the Fed's 2022 tightening cycle. Analysts attribute this decoupling to rising yields now reflecting fiscal concerns and higher term premiums rather than monetary policy alone, with some forecasting the benchmark rate could reach 6%.
Market data indicates that hard assets are increasingly pricing in fiscal sustainability risks and currency debasement over traditional real yield dynamics. While Bitcoin fell 64% in 2022 as rates surged, its recent resilience suggests investors view current bond market volatility through the lens of government borrowing uncertainty rather than restrictive Fed policy.
Bitcoin Decouples From Rising Treasury Yields as Fiscal Fears Drive Bond Markets
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