Wi-Fi and Bluetooth both occupy a section of the 2.4 GHz ISM band that is 83 MHz-wide. Bluetooth uses Frequency Hopping Spread Spectrum (FHSS) and is allowed to hop between 79 different 1 MHz-wide channels in this band.
Wi-Fi uses Direct Sequence Spread Spectrum (DSSS) instead of FHSS. Its carrier does not hop or change frequency and remains centered on one channel that is 22 MHz-wide. While there is room for 11 overlapping channels in this 83 MHz-wide band, there is only room for three non-overlapping channels. Thus there can be no more than three different Wi-Fi networks operating in close proximity to one another.
When a Bluetooth radio and a Wi-Fi radio are operating in the same area, the single 22 MHz-wide Wi-Fi channel occupies the same frequency space as 22 of the 79 Bluetooth channels which are 1 MHz wide. When a Bluetooth transmission occurs on a frequency that lies within the frequency space occupied by a simultaneous Wi-Fi transmission, some level of interference can occur, depending on the strength of each signal.
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in simple words...
Both wireless protocols operate in the 2.40- to 2.48-GHz ISM (industrial, scientific, and medical) RF band. WiFi uses one of 12 overlapping channels of 22-MHz bandwidth each, and Bluetooth frequency-hops among 79 1-MHz channels evenly spaced across the band. As a result, no matter which channel of WiFi is in use, a risk exists of interference between the two that will result in lowered data throughput for both.