The bond market is flashing a warning that bitcoin and U.S. stocks have yet to register.

The MOVE index, which measures expected volatility in the U.S. Treasury market, has jumped from around 80 on Tuesday to 104 on Thursday, its highest level since March when it hit 199, according to data source CoinDesk.

Volmex’s annualized 30-day bitcoin implied volatility index, BVIV, is subdued at around 37, close to its year-to-date low of 35. The index reflects bitcoin options traders’ expectations for price volatility over four weeks. Meanwhile, the Cboe VIX, which tracks expected volatility in the S&P 500, is hovering close to its year-to-date low of 14. Neither market is showing the same demand for volatility.

The divergence points to underlying strength in bitcoin and stocks. Higher volatility in Treasury notes, which underpin global finance and credit creation, typically tightens financial conditions and disincentivizes risk-taking in financial markets.

The divergence comes as government bond yields climb globally. The war in the Middle East has driven oil and diesel prices higher, complicating the inflation outlook and raising questions about how much further central banks may need to tighten policy. The U.S. 10-year Treasury yield briefly hit 5.2% on Thursday before easing to 5.163%.

When MOVE was last around this level in March, the S&P 500 stood near 6,350. It has since risen to 7,704, up roughly 21%. However, bond traders are now paying considerably more for protection against swings in interest rates.

06, turning negative for the first time since April 2024, though that reading is close to zero.

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