Fidelity Digital Assets said in a recent analysis that the yield on the U.S. 10-year Treasury has climbed to its highest level since Bitcoin was created, while total federal debt has surpassed $40 trillion. The firm also said interest payments have moved above Medicare, making them the second-largest item in the federal budget. According to Fidelity, Bitcoin historically showed low correlation with the U.S. 10-year real yield, but that relationship has turned increasingly positive in recent years, reaching above 0.6 in 2026, a record high. Over the past two months, Bitcoin has risen nearly 30%, while the U.S. 10-year Treasury yield has gained more than 10% over the same period. Fidelity said that as government debt rises, financing costs increase, and concerns over fiscal intervention intensify, Bitcoin’s fixed supply cap of 21 million coins could make it more attractive as a potential hedge against currency debasement and as a portfolio diversification tool. U.S. Treasury data also showed the federal budget deficit for fiscal 2026 widened to $1.99 trillion, up from $1.78 trillion in fiscal 2025, the highest level since the pandemic.
According to ChainCatcher, Fidelity Digital Assets said in a recent analysis that the yield on the U.S. 10-year Treasury has climbed to its highest level since Bitcoin was created, while total U.S. federal debt has exceeded $40 trillion.
Fidelity said federal interest payments now surpass Medicare, making them the second-largest category in the federal budget. The firm added that Bitcoin had long shown low correlation with the U.S. 10-year real yield, but that relationship has gradually shifted positive in recent years. In 2026, the correlation rose above 0.6, marking a record high.
Over the past two months, Bitcoin has gained nearly 30%. During the same period, the U.S. 10-year Treasury yield rose by more than 10%.
Fidelity said that as government debt keeps climbing, financing costs rise, and concerns around fiscal intervention grow, Bitcoin’s fixed supply cap of 21 million coins could increase its appeal as a potential hedge against currency debasement and as a portfolio diversification tool.
The firm also said that if current debt and rate trends continue, government interest payments could eventually become the largest spending item in the federal budget.
Data from the U.S. Treasury showed that the federal budget deficit for fiscal 2026 widened to $1.99 trillion, up from $1.78 trillion in fiscal 2025, the highest level since the pandemic. Although the Trump administration had pledged to cut spending, military outlays, Social Security spending, and interest on U.S. debt continued to rise, while corporate tax revenue declined, pushing the deficit wider.
This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan. Disclaimer:
The market information, project data, and third-party content displayed on this platform are for industry information sharing only and do not constitute any form of investment advice or return commitment.
Cryptocurrency trading carries high risks. Users should fully assess their risk tolerance and make independent decisions. All profits, losses, and legal responsibilities are borne by the users themselves.
