Bitcoin (BTC) Correlation with 10-Year Treasury Yield Plunges to 14-Year Low

According to data provided by Barchart, the correlation between Bitcoin (BTC) and the 10-year Treasury yield has plunged to one of its most negative readings in 14 years.

The correlation between Bitcoin (BTC) and the 10-year Treasury yield has become increasingly negative, reaching one of its lowest points in 14 years, according to data from Barchart.

Earlier this week, the correlation dropped to minus 53.

A Treasury yield represents the return investors can generate by purchasing U.S. government bonds.

Bond strategists anticipate that Treasury yields will level off in the coming months and potentially decrease slightly towards the end of this year.

The yield on the U.S. 10-year Treasury note has experienced a downturn this year as investors initially expected the U.S. Federal Reserve to implement multiple rate cuts. However, the yield subsequently rebounded amid stronger-than-expected economic data and persistently high inflation.

It remains uncertain whether the Fed will opt for two or only one rate cut this year, and there is a possibility that no rate cuts will be made in 2024.

As reported by U.Today, the Bitcoin price dropped to the $66,000 level on Tuesday as Bitcoin exchange-traded funds (ETFs) ended their 19-day streak of inflows. Despite the large inflows recorded last week, the primary cryptocurrency failed to surpass the $72,000 mark on Tuesday morning due to stronger-than-expected jobs data.

Another wave of volatility is expected for the primary cryptocurrency on Wednesday with the upcoming consumer price index (CPI) report and the Fed set to announce its interest rate decision.

Lower borrowing costs would benefit risky assets like Bitcoin.