Bitcoin Proves More Resilient Than Gold in Face of Rising Treasury Yields

U.S. Treasury yields have surged due to fiscal concerns driving up borrowing costs, and some research suggests that Bitcoin is proving more resilient to volatility than gold.

A study by Woofun AI found that against the backdrop of deteriorating fiscal conditions in advanced economies, Bitcoin exhibits a lower negative correlation with Treasuries than gold does. This means that when U.S. Treasury yields rise due to fiscal concerns, the price of gold tends to fall more sharply than Bitcoin.

According to data from TradingView and CoinDesk, the 90-day correlation coefficient between daily returns of Bitcoin and gold has reached a new high since 2020, at 0.59. This is significant because it suggests that investors are increasingly viewing Bitcoin as a better-performing hard asset than gold.

While both assets benefit from fiscal crises and financial repression, Bitcoin's unique relationship with the yield on 10-year U.S. Treasury bonds sets it apart. When rising bond yields impact non-yielding assets, the correlation between Bitcoin's USD exchange rate and the 10-year U.S. Treasury yield is -0.17, indicating a negligible effect.

However, investors should remain cautious as even with its low correlation to Treasuries, Bitcoin is not completely immune to macroeconomic risks. The study emphasizes that while this low correlation provides some buffer, it does not guarantee the asset's stability in times of economic uncertainty.