Fidelity: Bitcoin Market Cap Correlation with US Treasury Yields Hits Record High

BlockBeats news, October 17 — Fidelity Digital Assets recently released an analysis stating that the U.S. 10-year Treasury yield has recently risen to its highest level since Bitcoin's inception, while U.S. federal debt has surpassed $40 trillion, with interest expenses exceeding Medicare and becoming the second-largest expenditure item in the federal budget.

Fidelity pointed out that Bitcoin's correlation with the U.S. 10-year real interest rate had long been low, but in recent years it has gradually turned positive, with the correlation rising above 0.6 in 2026, hitting a record high. Over the past two months, Bitcoin rose nearly 30%, while the U.S. 10-year Treasury yield rose more than 10% over the same period.

Fidelity believes that as government debt climbs, financing costs rise, and concerns over fiscal intervention intensify, Bitcoin's fixed supply cap of 21 million coins may enhance its appeal as a potential hedge against currency debasement and a portfolio diversification tool. If current debt and interest rate trends continue, government interest expenses could even become the largest expenditure item in the federal budget in the future.

U.S. Treasury data shows that the U.S. federal budget deficit rose to $1.99 trillion in fiscal year 2026, up from $1.78 trillion in fiscal year 2025, the highest level since the pandemic. Although the Trump administration promised to cut spending, rising military spending, Social Security expenditures, and Treasury interest costs, combined with declining corporate tax revenue, have further widened the fiscal deficit.