Recent data from Bitwise reveals a historic collapse in the 60-day rolling correlation between Bitcoin (BTC) and US 10-year Treasury-bond futures, reaching its most negative level on record as of late May 2025. André Dragosch, head of research at Bitwise Europe, highlighted this as a pivotal moment, suggesting that traditional investors may be selling US Treasuries to buy Bitcoin. This decline in correlation marks a significant structural break in inter-market dynamics that has persisted since at least 2022.
The shift is attributed to inflation shocks, swelling fiscal deficits, and foreign reserve managers moving away from sovereign debt towards hard assets such as gold and Bitcoin. Bitwise’s March "Macro Fault Line" report documented a profound bear market in long-duration Treasuries, marked by a greater than 40% drawdown and unusual deviations in correlations among bonds, commodities, and foreign yields.
Institutional activity supports this trend, with net inflows of $6.35 billion into US spot Bitcoin ETFs in May alone, contributing to BlackRock’s iShares Bitcoin Trust (IBIT) amassing $71 billion in assets under management. Moreover, major corporate players continue accumulating Bitcoin: Michael Saylor's company acquired over 4,000 BTC worth $427 million in May 2025, and firms such as Semler Scientific, Galaxy Digital, and GameStop have also integrated Bitcoin into their treasuries.
Jack Dorsey’s Block Inc. plans to enable Bitcoin payments across 4 million Square merchants by 2026, further cementing Bitcoin’s utility and adoption. The declining link between Bitcoin and traditional bonds – now weaker than gold’s correlation – underscores Bitcoin’s emerging role as an alternative store of value and portfolio insurance, especially amid sovereign debt concerns.
While tighter financial conditions and regulatory challenges persist, this evolving landscape suggests a departure from the traditional 60/40 portfolio model. Investors appear increasingly drawn to Bitcoin's counterparty-risk-free nature and its potential as a digital bearer asset in an era of uncertain sovereign debt markets.
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