Apple - Bluetooth and WiFi interfering with one another since Yosemite
Bluetooth and IEEE 802.11/b/g/n (WIFI) use almost the same frequency bands:
- Bluetooth: 2.402 - 2.480 GHz (79 channels)
- WIFI 2.4 GHz (IEEE 802.11/b/g/n): 2.4 – 2.4835 GHz (11, 13 or 14 channels depending on the country)
Usually Bluetooth uses frequency hopping and changes the possible 79 x 1 MHz bands 1600 times a second to avoid disturbances while WIFI uses fixed channels.
Obviously something went wrong developing the latest Bluetooth- or WIFI-drivers.
The only workaround until Apple gets their drivers fixed is using dual band wireless access points. Those devices use two different frequency bands: 2.4 – 2.4835 GHz and 5.18 - 5.825 GHz (with some gaps). Connecting to WIFI 5 GHz (IEEE 802.11a/h/n) will not interfere with Bluetooth.
Almost all Macs sold since 2006 support 802.11 a/b/g/n.
Apple's answer: Wi-Fi and Bluetooth: Potential sources of wireless interference
BTW: Not only typical RF-based devices (like wireless phones, etc) but also bad-shielded USB3-devices and cables interfere with WIFI (2.4 GHz) and Bluetooth.
Most likely the introduction of Continuity in Yosemite increases the demand for wireless bandwidth and that impinges upon the already crowded 2.4GHz band shared between Bluetooth and Wi-Fi. Many pieces of evidence support this theory:
Bluetooth and Wi-Fi interference only came to the fore after the introduction of Yosemite so it can't be just due to the fact that they share the same frequency band (otherwise Mavericks would suffer from the same problem on a wide scale).
The more Bluetooth devices that one has the more likely that one's Wi-Fi connection would deteriorate or even get dropped completely.
The presence of any Bluetooth device that requires a large bandwidth and constant connection, e.g. Bluetooth speakers, almost always incurs interference.
Removing Bluetooth PAN from one's network or terminating AirDrop service work for some (most likely those with very few Bluetooth devices) albeit for a short period of time suggests that congestion is a culprit.
Finally, those who use routers with dual-band support, e.g. one from the latest AirPort lineup, don't seem to suffer from this problem.
I also suspect that people who suffer from this type of interference the most are those who have devices that can only support up to 802.11b/g on their network, e.g. a pre-2009 PC or Mac.
Despite the instability of discoveryd, Apple kept it for three updates before finally removing it on the fourth. Apple must've felt the need for a new network service that can both accommodate the augmented bandwidth requirement of Continuity and the security demand that it wants to meet.
Update: Restricting my Airport Express (1st gen) to 5 GHz has made the problem go away completely and my Wi-Fi speed has jumped an incredible three-fold.
Open the Terminal app (Applications -> Utilities -> Terminal), paste the following code, press Enter and type your admin password when prompted.
sudo defaults write /Library/Preferences/com.apple.airport.bt.plist bluetoothCoexMgmt Hybrid
Then reboot. This worked for me on macOS Catalina 10.15.1
Credit 1, 2
BTW, you may find some sites saying to turn off Handoff. I tried that. It didn't help.