**[Fidelity: Bitcoin Market Cap Correlation with U.S. Treasury Yields Hits Historic High]** BlockBeats News, October 17 — Fidelity Digital Assets recently released an analysis stating that the yield on the U.S. 10-year Treasury has risen to its highest level since Bitcoin's inception, while the U.S. federal debt has surpassed $40 trillion, with interest expenses exceeding Medicare, making it the second-largest expenditure item in the federal budget. Fidelity pointed out that Bitcoin's correlation with the U.S. 10-year real interest rate has historically been low but has gradually turned positive in recent years, reaching over 0.6 by 2026, marking a historic high. Over the past two months, Bitcoin has risen nearly 30%, while the yield on the U.S. 10-year Treasury has increased by more than 10% during the same period. Fidelity believes that as government debt climbs, financing costs rise, and concerns over fiscal intervention intensify, Bitcoin's fixed supply cap of 21 million coins may enhance its appeal as a potential hedge against currency devaluation and a portfolio diversification tool. If current debt and interest rate trends persist, government interest expenses could even become the largest expenditure item in the federal budget in the future. According to data from the U.S. Treasury, the U.S. federal budget deficit is projected to rise to $1.99 trillion in fiscal year 2026, up from $1.78 trillion in fiscal year 2025, marking the highest level since the pandemic. Despite promises from the Trump administration to cut spending, rising military expenditures, Social Security costs, and interest on national debt, coupled with declining corporate tax revenues, have further widened the fiscal deficit. [Original Link]