Why are some investors making the shift?

Why do some investors choose bitcoins over government bonds?

Historically, there were sovereignty bonds such as American treasures, Japanese government bonds and German volumes, assets for investors with risks. They are usually perceived as minimal risky assets offering permanent revenues. Since the creation of Bitcoin 13 years ago, however Bitcoin as an alternative Bonds are gradually growing in investors’ minds.

The interplay between the balance sheet of the federal reserve system and the money supply of M1 and M2 is also an important consideration that will help understand why some investors are moving to bitcoins (BTC).

• M1 money supply is a measure of the total amount of money easily available in the economy. It includes the most liquid assets: cash, demand deposits (control accounts) and other similar control deposits.
• The Money supply m2 It is a wider measure of money supply than M1. It includes all M1 assets in combination with savings, retail cash funds (IMF) and small deposits.

The US Federal Reserve Action to expand and reduce its balance sheet with 6.69 trillion USD directly affects the supply of M1 and M2, which in turn affects inflationBond revenues and investors’ trust in FIAT asset. When the Fed adds or removes money, it changes how much cash (M1) and savings (M2) are available. These changes affect inflation, how many interest bonds apply and how many people believe in traditional (fiat) money.

In the last few years has a Fed kept the rate of Federal Funds in a high range between 4% and 5% and also signaled Rates It is not necessarily immediate. 26. May 2025, Moody’s reduced US debt evaluation from AAA to AA1, citing fiscal instability and political dysfunction.

Moreover Japanese bond crisis From 2024-2025, he demonstrated how the shift between demand and bond yield, reinforced by American tariff policies, can affect investors’ sentiment and the status of a safe shelter of government debt. In this macroeconomic scenario Bitcoin is increasingly strengthening its position as a hedge against inflation.

Since June 13, BTC exceeded the S&P 500, Gold and Nasdaq 100 by publishing 375.5% of profits for three years compared to 59.4%, 85.3% and 86.17%.

Did you know that? Bitcoin developers have decided to increase the OP_RETURN data transaction limit from 80 bytes to 4 megabytes as confirmed in an update on Github. Although this code update via the release of Bitcoin Core 30 has evoked a debate community, it is aimed at solving concerns with data storage techniques and improving the set of disordered transaction output (UTXO). This edition is scheduled for life in October 2025.

The rise of bitcoins is in the portfolio of modern investor

US Securities and Stock Exchange Commission Approval of funds of traded bitcoins on the stock exchange (ETF) On January 10, 2024, the role of Bitcoins in the portfolio of modern investors, traditional and retail. 12 Bitcoin SPOTs ETFS in the US has since 11 June 2025 a total managing assets (AUM) in the amount of $ 132.5 billion per data from Bitbo. He is a monumental character given that these ETFs have been traded only for more than 300 days.

Below is the total US SEC timeline that approves a list of bitcoin spot ETFs:

• 2013: Cameron and Tyler Winklevoss, founders of Gemini cryptocurrency exchange, will give the first ever Bitcoin ETF with SEC. Stray Scale launches Bitcoin Investment Trust.
• 2017: The SEC, which quotes concerns about maturity and manipulation with the market of asset, rejects the ETF Winklevoss application.
• 2018: SEC rejects the ETF application of the Winklevoss twins by citing insufficient market controls.
• 2020: The graying converts its confidence in the SEC report, which aims to increase the transparency of funds.
• 2021: SEC approves the first American Bitcoin Futures ETF application, and at the same time continues to refuse Spot ETF applications.
• 2023: The Gray Old is suing Sec after the refusal of its application to convert Bitcoin Trust into a point ETF. The US Court of Appeal rules that SEC failed to justify the rejection, and thus forced him to re -consider the application.
• Half 2023: The largest asset manager in the world, Blackrock, Files for Spot Bitcoin ETF. The wave of Bitcoin ETF applications follows companies such as Fidelits, Franklin Templeton, Wisdomtree and others.
• January 10, 2024: SEC approves 11 bitcoin ETFs that will start trading on American stock exchanges the next day.

Since then, the tides and drains of these ETFs have been different with the market sentiment but have Broken multiple records And it is expected to do so because of institutional interest in asset. The graph below shows the daily tide and drains of the American BTC Spot ETF since their start 11 January 2024.

According to the calculations in accordance with the modern portfolio theory (MPT), the Sharpe portfolio ratio can be optimized around 16% allocation to bitcoins as revealed message Galaxy released on May 27, 2025.

• Modern portfolio theory (MPT): This is a frame developed by the Nobel Laureate Harry Markowitz laureate in the 1950s to create optimal investment portfolios. Since then, it has been used as a trustworthy analytical tool for modeling scenarios of the ideal portfolio allocation for different classes of assets.
• Sharpe ratio: This metric measures the return on investment adapted to the risk. It’s a way to measure, how much return you get for the risk you are taking.

At this level of portfolio allocation, the Sharpe ratio for BTC would be around 0.94. For comparison estimated Sharpe ratio of American treasury bonds is between 0.3 and 0.5, to curvo data. This means that US treasury bonds offer less return on the same level of risk. To put it simply, Bitcoin gives you approximately 0.94% more return for every 1% risk, making it more efficient than bonds if you are satisfied with a higher risk.

Did you know that? On June 9, 2025, Blackrock’s Ishares Bitcoin Trust ETF (Ibit) became the fastest ETF in history that exceeded $ 70 billion in AUM. As Senior Bloomberg ETF analyst Eric Balchunas has shown On X, the fund reached this brand in just 341 days, five times faster than the SPDR Gold Shares (GLD) ETF, the previous record holder.

Bitcoins or sovereign bonds: Which one is more lucrative in 2025 for investors?

There are several reasons why even investors of the aversion with a risk are considering investing in bitcoins instead of sovereign bonds-Mimo others of the yield, volatility, regulatory considerations and availability.

Below is a comparative overview of two asset classes and their unique features for investors:

While the return of bitcoins is not ensured, the price of the asset reached 10 June 2025. Storage flower Estimates that for a rate of June 12. half. Half -Half -Half -Half -Half -Half -Off will be mined 2140. This low -inflow rate contributes to the story that Bitcoin is a rare asset that becomes only rarer, because the events of half Bitcoins will reduce the block reward on each new block mined in the network by 50%.

Millions of investors like Larry Fink, Stanley Druckenmiller and Paul Tudor Jones are increasingly turning to bitcoins as hedge against inflation and poor government management. Fink sees Bitcoin as a modern alternative to gold in the middle of what he calls the highest built -in inflation for decades.

Druckenmiller not only supports bitcoins, but openly short -circuit US bonds and criticized the Fed’s rate disconnected from market reality. Meanwhile, Jones warns against the US spiral debt and expects politicians to inflate the way out and strengthen the attraction of bitcoins as a value storage. Together are these titani from Wall Street signaling Move: long bitcoins, short ties.

Did you know that? The Michael Saylor’s strategy (formerly known as Microstrategy) has received 582,000 BTC since the company began to buy tokens in August 2020. These chips were purchased at an average price of $ 70,086 the latest purchase Z 1 045 BTC 9 June. The strategy currently owns 2,771% of the maximum limited bitch bid.

How fixed bitcoin offer and easy access disrupt traditional portfolio structures

The beginning of the Bitcoin network led to the birth of a new class of financial assets. BTC is one of the only assets in the world that is unchanged, proven rare and has a a Permanently closed supply.

Because it is firmly encoded in the main network protocol, more than 21 million bitcoins can never be stamped. Since June 11, 2025, more than 19.8 million BTC mintedto data Bitbo. This represents 94.6% of the total offer.

May 26 Hasrate Bitcoin nets Historically hit a maximum of 913 Exhales per second (Eh/s), which is 77% increase compared to 2024 by 519 Eh/s. HASHRATE represents the overall computing power used by miners evidence of work to verify transactions and add blocks to the network. This means that miners have to spend more and more computing forces to contribute to the network.

On the other hand, the offer of sovereign bonds is determined by a government that can issue new bonds if necessary. So there is no perception of the lack of bonds issued by the government.

In addition, sovereign bonds are severely limited by several factors, especially for retail investors:

• Limited Platforms for Access: Retail investors often cannot directly access government bonds and have to rely on intermediaries such as asset managers, banks or brokers.
• Complicated infrastructure settlement: These bonds are usually cleaned through institutional agreements such as Euroclear and Clearstream that are not intended for retail use.
• Lack of immediate liquidity: Government bonds are only available to investors during the trade hours of this particular country, which does not allow investors to release their position outside the market hours of the and holiday weekends.
• Foreign sovereign bonds: Buying foreign sovereign bonds requires investors to have access to international brokerage accounts and also include monetary risk and significant geopolitical risk.

Since Bitcoin is a decentralized and accessible asset with an availability of 24/7, it exceeds many challenges that investment in sovereign bonds could represent. Moreover Wallets Continue to improve user experience and simplify on board and as access to centralized and decentralized cryptocurrencies It is expanding, Bitcoin becomes an even more accessible pace. This ease of approach compared to sovereign bonds is obliged to help investors consider shifting from sovereign bonds to BTC.