Binance Research's latest research report systematically analyzes the evolutionary relationship between the bond market and the cryptocurrency market, identifying and dissecting the influencing pathways, assessing the current market conditions, and predicting potential future trends and their impacts through scenario simulation.
The report points out that the bond market is influencing the cryptocurrency market through multiple channels, mainly including risk appetite, liquidity, fluctuations in opportunity costs, and macroeconomic linkage mechanisms. Historical data show that the correlation between Bitcoin and the U.S. 10-year Treasury yield has phase characteristics (positively correlated from 2021 to 2022, then negatively correlated from 2022 to 2023). In addition, the widening of the yield curve spread (e.g., 10-year - 2-year) has historically been positively correlated with Bitcoin, while the widening of credit spreads (high-yield U.S. Treasuries) has shown a stable negative correlation.
The report also points out that there are multiple structural factors behind the current volatility in the bond market, including tariff uncertainty, sticky inflation, government debt issuance, and liquidity withdrawal potentially caused by the low balance of overnight reverse repos by the Federal Reserve and the Treasury General Account (TGA) replenishment.
Finally, the report emphasizes that the direction of the cryptocurrency market may, to some extent, depend on the stability of the bond market and changes in the macro environment. If uncertainty persists, the market may maintain a range-bound fluctuation; if a 'soft landing' is achieved, it is expected to drive a market rebound; but if a severe crisis occurs, it may trigger a deep sell-off and deleveraging in the cryptocurrency market.
