[Analysis] Bond-Market Volatility Jumps, a Warning Sign for Bitcoin

Volatility in the U.S. Treasury market has surged, even as Bitcoin and U.S. stocks remain relatively steady.

CoinDesk said on September 25 that the bond market is sending a warning signal that has not yet shown up in Bitcoin or U.S. equities.

According to CoinDesk, the MOVE Index, which measures expected volatility in the U.S. Treasury market, climbed from about 80 on Tuesday to 104 on Thursday. That marked its highest level since March, when it hit 199.

By contrast, volatility gauges for Bitcoin and U.S. stocks are hovering near their lows for the year. Volmex's Bitcoin Implied Volatility Index, or BVIV, which reflects expected 30-day volatility for Bitcoin, stood at about 37, close to its yearly low of 35. The Cboe Volatility Index, or VIX, which measures expected volatility for the S&P 500, was also near its yearly low at around 14.

While volatility in Bitcoin and equities remains subdued for now, the report said investors should be alert to the risk that stress in the bond market could spill over into risk assets.

CoinDesk said Treasuries underpin global finance and credit creation. As volatility in that market rises, financial conditions typically tighten and investment in risk assets across financial markets tends to weaken.

It added that the war in the Middle East is driving up international crude oil and diesel prices, complicating the inflation outlook. Uncertainty is also growing over how much further central banks may need to tighten monetary policy.