Investor appetite for risk assets is rising as the prospect of a sustained bitcoin rally converges with the sharp drop in U.S. Treasury bond volatility.
Summary
MOVE index hits lowest level since October 2021
The ICE BofA MOVE index, a widely tracked gauge of expected volatility in U.S. Treasury bonds over four weeks, has fallen to 58, its lowest reading since October 2021, according to TradingView. Moreover, this marks the extension of a decline that began in April last year, signaling a notably calmer backdrop for the global bond market.
The U.S. Treasury market is viewed as the cornerstone of global finance, with outstanding credit quality and an extremely low perceived risk of default. Its debt is widely deployed as collateral across loans, derivatives, and other instruments, effectively underpinning much of the world’s financial plumbing and day-to-day liquidity.
When Treasury prices swing violently, credit conditions tend to tighten and lenders become cautious, which reduces risk-taking across both the real economy and financial markets. However, when price moves are subdued, credit creation generally becomes easier, encouraging investors to allocate more capital toward riskier assets such as cryptocurrencies and growth equities.
Bitcoin trades near $96,300 as volatility sinks
The current bond market backdrop is increasingly supportive of rallies in bitcoin, which is trading around $96,300, as well as in major tech stocks. That said, this calmer environment follows a sharp reset in digital asset prices during 2022 and a powerful price recovery through 2023, underlining how macro conditions can swiftly change sentiment.
Bitcoin has already rallied about 10% since the start of the year, pushing analysts to forecast an advance beyond $100,000 for the first time since mid-November. The combination of subdued Treasury bond swings and renewed institutional interest is strengthening expectations that the ongoing bitcoin rally could extend into six-figure territory.
Correlation with Nasdaq 100 and MOVE index remains key
While some supporters describe bitcoin as digital gold, its trading history shows a closer relationship with Wall Street’s tech-heavy Nasdaq 100 index. Moreover, it has generally moved in the opposite direction to the MOVE index, which tracks implied U.S. Treasury bond volatility and acts as a barometer of stress in government debt markets.
This inverse relationship with the MOVE index persisted during bitcoin’s sharp crash in 2022 and throughout the bull run that began in 2023. In practice, periods of falling bond volatility have often coincided with stronger demand for cryptocurrencies and growth shares, reinforcing the narrative that a move index decline can act as a tailwind for speculative assets.
Supportive backdrop but lingering macro risks
The current drop in Treasury volatility does not guarantee further gains, and no single signal should be treated as a flawless timing tool. However, the present mix of calmer bond markets, solid price momentum, and continued bitcoin etf inflows is adding another layer to the bullish thesis for digital assets.
Markets still face potential headwinds, especially if geopolitical tensions between the U.S. and Iran intensify or if frustration over delays to the Clarity Act crypto regulation bill grows. Such developments could quickly reduce risk appetite, reminding traders that even a strong bitcoin rally remains vulnerable to sudden shifts in macro and policy expectations.
In summary, the lowest Treasury volatility since October 2021, as captured by the MOVE index reading of 58, is helping support the broader case for a continued upswing in bitcoin and other risk assets, even as investors stay alert to geopolitical and regulatory risks.
