Opinion: The Hedging Relationship Between U.S. Treasuries and Stocks Has Broken Down, and BTC, as a Risk Asset, Is Under Dual Pressure
For the past 20 years, U.S. investors relied on a free insurance policy: when stocks fell, bonds rose, cushioning portfolio losses. This reliable inverse correlation underpinned entire financial strategies. However, this mechanism broke down around 2020 and has not recovered. Currently, the two-month rolling correlation between the S&P 500 and 10-year Treasury yields is at -0.69, its lowest level since 1996, indicating stocks and bonds are moving in sync to an unprecedented degree, eliminating the traditional portfolio shock absorber.
The失效 of this hedge is not simply due to lost confidence in U.S. debt. The key driver is the shift from growth-dominated to inflation-dominated market narratives. When growth fears prevail, stocks and bonds move inversely. Since 2022, persistent inflation volatility has been the dominant factor, causing both asset classes to suffer simultaneously from higher inflation expectations. Investors now seek safety without duration risk, favoring cash, dollars, and short-term Treasuries while selling long-duration bonds. Record U.S. deficits, rising net interest payments, and waning foreign demand (e.g., from Japan) are pressuring long-term yields, with the 30-year yield surpassing 5%.
This environment places Bitcoin, as a risk asset on the far end of the risk curve, under dual pressure. Higher risk-free rates increase the opportunity cost of holding non-yielding assets like Bitcoin, while falling equities reduce overall risk appetite. Bitcoin's performance has become highly sensitive to macro conditions such as real yields, dollar strength, and financial conditions. While its long-term thesis as a fixed-supply asset outside the sovereign credit system is strengthened by these fiscal trends, the same conditions hurt it in the short term.
The return of bonds as a effective hedge requires inflation volatility to subside, growth risks to retake dominance, and the Fed to have room to ease policy. Until then, Bitcoin trades in a market where the deepest asset class no longer absorbs shocks, removing the safety floor for all risk assets, especially those that pay nothing to wait.
marsbit07/20 05:12
