US Long Bonds Log Worst Decade on Record as Bitcoin Draws Flows
US Long Bonds Log Worst Decade on Record as Bitcoin Draws Flows
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- The main variable is whether high Treasury yields remain elevated as federal borrowing grows and inflation pressures persist. If bond weakness continues, capital rotation into non-sovereign assets such as Bitcoin could stay part of the macro discussion.
- Markets will also watch rate expectations. The input cites Polymarket traders assigning a 52% chance of a September rate hike, making policy repricing a near-term driver for both bond sentiment and crypto risk appetite.
- Spot Bitcoin fund inflows are another key signal. The reported weekly intake of $987.7 million suggests institutional demand is still present even as traditional fixed-income markets remain under pressure.
Long-dated US Treasury bonds lost about 2% annually over the decade ending in August 2026, their worst 10-year performance since 1803 according to data cited from Bank of America, as investors also tracked continued inflows into US spot Bitcoin funds and shifting expectations for Federal Reserve policy.
The bond-market data points to an unusually prolonged drawdown in long-duration US government debt. According to the figures cited, negative 10-year returns have appeared in 25 months since records began in 1793, and 24 of those months occurred in the current decade. Jim Bianco of Bianco Research described bonds as the worst investment in American history.
The reported weakness was tied to a familiar macro combination: fixed coupon payments lagging behind inflation, alongside the effect of Federal Reserve rate hikes on long-duration assets. The input also links current high yields to heavy federal borrowing, with US debt cited at $40.1 trillion as of Sept. 3. Oil above $100 was cited as an additional source of inflation pressure.
At the same time, Bitcoin was trading near 77,934, about 2% below its 2025 record, according to the input. While the bond story and Bitcoin trading are separate developments, they are being viewed against the same macro backdrop of sticky inflation, elevated yields and uncertainty over the Fed’s next move.
Institutional crypto flows remained a notable contrast. US spot Bitcoin funds attracted $987.7 million in the week ending Sept. 4, outperforming other crypto funds in inflows, according to the input. That leaves Bitcoin positioned as one of the assets drawing fresh allocations while traditional duration-sensitive instruments remain under strain.
Why It Matters
The move matters because it sharpens a broader market debate over the role of government bonds in portfolios when inflation and rate volatility remain high. If Treasurys no longer offer the same stability investors expect in risk-off periods, attention may increasingly shift toward alternative stores of value and assets with different supply dynamics, including Bitcoin.
It also matters for crypto market structure. Strong spot Bitcoin fund inflows during a period of bond-market stress suggest institutional access vehicles are becoming an important transmission channel between macro conditions and crypto demand, even when the immediate driver is not a crypto-specific event.
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