Fidelity Digital Assets said the U.S. 10-year Treasury yield recently reached its highest level since Bitcoin’s launch, while federal debt exceeded $40 trillion and interest payments surpassed Medicare spending to become the second-largest federal budget item. According to ChainCatcher, Fidelity found that Bitcoin’s correlation with the U.S. 10-year real interest rate, historically low, has gradually turned positive and climbed above 0.6 in 2026, a record high. Over the past two months, Bitcoin gained nearly 30%, while the 10-year Treasury yield rose more than 10%.

Fidelity said rising government debt and borrowing costs, along with concerns about fiscal intervention, could make Bitcoin’s fixed supply cap of 21 million more attractive as a potential hedge against currency debasement and as a portfolio diversifier. If current debt and interest-rate trends continue, government interest payments could eventually become the largest item in the federal budget.

U.S. Treasury data showed the federal budget deficit rose to $1.99 trillion in fiscal year 2026, up from $1.78 trillion in fiscal year 2025 and the highest level since the pandemic. Although the Trump administration has pledged to cut spending, rising military and Social Security outlays and interest on the national debt, alongside declining corporate tax revenue, have further widened the deficit.