➡ This text discusses the comparison of risk between US government treasuries and Bitcoin using the Sharp ratio, a measure of an investment’s risk-adjusted performance. It explains that while Bitcoin is more volatile and has a higher potential for loss, it also has a significantly higher potential for return. The text suggests that due to these factors, Bitcoin and gold are likely to outperform US treasuries in the future, leading to a potential shift of funds from the bond market into Bitcoin and gold. The text also mentions the role of Bitcoin Treasury companies in creating unique products to attract these funds.

The world’s safest investment just collapsed, and almost nobody saw it coming. Wall Street’s most trusted investment lost trillions in value, and if you’re still holding on to it, your portfolio could be next. But what caused this crash? And more importantly, what should you do now? In the next few minutes, you’ll discover why the smartest investors in the world are quietly moving billions into a surprising asset, and how one simple decision right now could protect your future wealth. My name is Mark Moss. I’ve spent decades analyzing financial markets, economic cycles, and investment strategies.

As a partner in a Bitcoin venture fund, an advisor to publicly traded companies navigating this exact crisis, I’ve helped thousands of investors see these trends early and position themselves ahead of the herd. Now today, I’m going to share those same critical insights with you, so let’s go. All right, so we are talking about the safest investment in the world. We’re talking about U.S. Treasuries. As a matter of fact, they are called the risk-free investment. They’re risk-free because the government’s always going to pay them, right? Well, maybe, maybe not. Let’s talk about this a little bit.

So the U.S. Treasuries are considered the safe play, because of course, the government can just print more dollars, right? So what they’re used for is fixed income. So it’s a way to hedge your position. You don’t need to be all in stocks, you hedge your position. And of course, it’s backed by the full faith of the U.S. government knowing that the U.S. government never defaults on its debt. It’s always going to pay. We’ll talk more about that in a minute. And so what modern portfolio theory is, is basically you dedicate, allocate 40% of your investments, your portfolio, into this.

That’s 40% portfolio construction. You can see it’s known as a 60-40 portfolio. Now, if you follow my channel regularly, you know, I often talk bad about this, but if you have money with a 401k or mutual fund or some type of fund advisor, they probably have you in some variation of this. 60% stocks, 40% bonds. Now, the 60% stocks are for volatility. Volatility is things go up and down, but of course, we want them to go up, and the bonds are supposed to limit the volatility or dampen the downside of that.

They’re meant specifically, like I said, to reduce volatility. As a matter of fact, if we go onto, I believe this is from Investopedia, we can look at this. Volatility is a part of investing. You don’t invest into things that don’t move. You don’t invest into dollars. So volatility is things going up and down. So we need that if we’re going to make money. Short of it’s going down, go long if it’s going up. But by incorporating bonds into the portfolio, 60-40, investors can potentially reduce volatility relative to an all equity portfolio without sacrificing return.

So they can complement, bonds can complement stocks in a diversified portfolio, potentially helping reduce overall portfolio risk. How? By limiting the volatility. So we don’t want to go all stocks because it’s too volatile. So we’ll limit that with bonds. I want you to understand that’s why I’m emphasizing that part. And what I’m going to show you right now is why bonds have failed. We’re going to look at real risk because as real investors, as professional investors, we don’t just think about YOLO and going long. We always have to think about a risk adjusted return.

A hedge fund is called a hedge fund because they’re hedging their positions. They’re taking that risk into account. So based off of all that information, what should we do now? Don’t worry, I got you. Okay, so let’s talk about the bond story just real quickly. So again, smart investors, they measure risk. So when I’m looking at the potential return, I also want to think about the potential volatility that I have. And so then the question we have to have is, are bonds really risk free? Are they really the risk free return? And if not, how much risk do they have? And if they have risk, then how should I think about allocating to my portfolio with those? And the question I’m going to answer for you, because most people think with Bitcoin, Mark, stop talking about that thing, that fake internet money, whatever it is, it’s too volatile, right? So let’s take a look at is bond, are bonds riskier? Are bonds riskier or more volatile than Bitcoin? You might be surprised when we break out the math.

Don’t, don’t, don’t miss this. Okay. So again, the US Treasury US teas, we can look at their returns. Now we can, of course, look at the, the, the short term ones, the five year, the 10 year, the 30 year, 20 or whatever we want, but we’ll use it a bond ETF. It’s the TLT. Now the TLT represents the bonds. It’s a long bond, a 20 year plus bond. All right, so it’s a really good way for traders to go in and out of bonds, hedge their positions. And if we look at this over a five year period since 2020, we can see that it’s down 47%.

Now, I don’t know about you, but if I lost 40% of my money over five years, I wouldn’t really consider that risk-free. I wouldn’t really consider that safe. So you have to think a little bit differently about this. You can see it’s almost like a complete straight line going down. Now you might say, Mark, you’re probably cherry picking. Of course, we know that long-term bonds are down, but what about if we looked at more short-term bonds, right? Isn’t that why Janet Yellen was front loading the end of that spectrum? What about that? Well, we can take a look at that in another ETF, AG, and we can compare TLT, which is all the way down here to AG, and we can see that it hasn’t dropped near as bad.

It’s not near as risky and bad. In this case, you only lost 16% of your money. Still risky in my opinion, right? Over five years. And we’re not cherry picking data. I mean, I suppose if we look at this little window right here, we made money, but we’re not cherry picking data. Like I said, this is over five years. Okay. Now you might also be saying, but Mark, that doesn’t take into account the consideration of the dividends that they pay, right? Because I’m banking dividends, so that’s certainly got to offset the amount of losses, right? Well, let’s take a look at that.

So here we go back to the TLT, the long bond, and we can see even with the dividends, it’s down. Now it’s only down 38%. I mean, it’s better, but it’s not 50%, but it’s still almost 40% that we’re down because of course the dividends aren’t very much. And we can see the same with AGG as well. On this one, we’re only down about four and a half percent. Not so bad, but we’re still losing money. And apparently it was considered the risk free return. Now it gets a little bit worse because we have to take into consideration inflation.

Now we’re going to use CPI, consumer price inflation, which of course is a false metric. That’s around 3%. The real inflation rate is the rate of monetary debasement, how fast they’re printing money. But if we just use the government’s number, CPLies, we can see that we are basically going in a downward spiral, straight down. Now that is in real returns. We can also see the same thing for AGG as well. Again, adjusted for inflation, it just makes it look that much worse. And we are just going in a downward trajectory. So if the real risk-free isn’t risk-free, what should we be thinking? Well, let’s dig in a little bit more because remember, bonds were supposed to limit the volatility that we get from stocks as if that’s a bad thing.

So let’s take a look at the volatility of this. Now there’s a couple of things I want to point out to you. So number one, let’s look at the TLT again, sort of representing the long, if you will. And this shows the volatility that we have. So what we can see is that we had a high of about 33. This is in about mid 2022. That’s when the, if you remember, back in around October 2022, the markets were crashing, the bond auctions were starting to fail. That’s when the volatility got really high.

Since then, the stock markets have gone up and now we’re down to about 15. Still pretty volatile. If we take a look at AGG, again, representing the shorter term, shorter end of the curve, we can see it’s a little bit better. Here we have a high of only 14 right here, and we’re averaging about six. So quite a bit better, but we still have to see that there’s a lot of volatility. Now, again, is volatility bad? Well, not necessarily, right? We need volatility. If we want liquidity, if we want asset prices to go up, we’re going to need the volatility.

But again, this is the main argument that’s put against Bitcoin because Bitcoin is too volatile. All right. So now that I’ve shown you the volatility numbers, wait till I show you what’s coming up next. Let’s take a look at this. Okay. So let’s compare risk now in the risk-free trade in the US government treasuries, which is basically the bedrock of the entire global financial system. Let’s compare the risk to Bitcoin, the most risky asset there is. Okay. So we use something called a sharp ratio. Basically what the sharp ratio is, is the measure of an investment’s risk adjusted performance.

Because remember, only amateurs think about how much money they’re going to make. Professionals always think about a risk adjusted return. What does that mean? If something is very risky, it could go up 100x. It could also lose all its money. So I would only, because it’s so risky, I would only put a little bit of money into it. And I only need a little bit because it has so much potential to go up. If something is safer, I can put more money into it. So for example, micro strategy is the biggest Bitcoin treasury play there is.

They have about 600,000 Bitcoin. I can put way more money into that than I would a smaller one like MetaPlanet for example. MetaPlanet has more risk, but it also has more return potential. That’s what we think about it. So for the sharp ratio, we want to measure the risk adjusted performance calculated by comparing its return to that of a risk-free asset, which in this case is the US Treasuries. So in this less than 0.5 is bad and greater than one is good. That’s how we grade this. So again, Bitcoin is very volatile.

So let’s take a look and see what the sharp ratio tells us. Now, if we take a look at this, we can see as of June 30th, 2025, TLT, the US Treasuries, the long bonds, had a max drawdown of 48%. That’s where we’re at right now over the last five years. I showed you that. Ag the short is about down about 18%. Bitcoin max drawdown of 76%. That’s massive. Well, obviously, Mark, Bitcoin is more risky, right? Because it dropped 76, but the US Treasuries only went down 48. I’d rather lose 48 than 76.

Okay. But that’s only a piece of it because we also have to look at the potential for the return. Now in this, remember what I told you the sharp ratios in this, the TLT got a sharp ratio of 0.3 when Bitcoin and the short had a 0.4 while Bitcoin had a 1.0. Now, if you remember, let’s go back and look what was good and bad. Less than 0.5 is bad. More than one is good. Why is that? Because we don’t just look at the drawdowns. We have to look at the bounce back.

We have to look at the potential returns that we have on top of that to fully understand risk. So let’s look at a chart. Okay. So we looked at the max drawdowns, but in order to understand the risk and the sharp ratio, we also have to look at the total returns, right? Can’t look at the bad without looking at the good. So what we see the total returns, the positive returns on TLT was three years, minus 14%, not positive, minus, that’s the good return. Five years, minus 38%, not positive, the negative return, right? And we have AGG, let’s just jump to five years, minus 3%, but with Bitcoin, it was positive three, positive 28, positive 14, positive 79, positive 470, for a total 1,078 over five years.

So we can look at the max drawdown, it was about 46 for the TLT, 78 for Bitcoin. But we have to look at the return, which for Bitcoin was over a thousand, and for TLT for the treasury, the risk-free trade was down 38%. Now you start to understand how the sharp ratio works. All right. So now that you understand that there’s risk and reward, there’s return and there’s loss, and that’s what makes up the sharp ratio, a risk adjusted return. Let’s put it into some actual math. Let’s do some calculations here, because remember, portfolio theory is I’m supposed to put some into each, right? So if we took $10,000 and we put it into each one of these, the TLT, the long bond, the AGG, the short bond, and Bitcoin, and we held it there for the last five years.

The $10,000 in the risk-free trade, the US government treasury would have lost and would have only become 6,181. In the short bond, we would have put 10,000 in. We’d now have 9,623. It didn’t lose as much. Still lost. If we put the $10,000 into Bitcoin, we’d be sitting on $107,900. What that means is you 10x your money, which is why it’s greater than the risk, because you can’t look at the good without the bad or the bad without the good. And that’s exactly what we see here. That’s pretty shocking, right? Okay, so now that we know all this, what are we going to do about it? How do we position ourselves to win? Well, there’s a couple things.

Number one, we want to look to the future. Markets are what we call forward looking. They’re discounting mechanisms, right? We’re trying to buy something cheaper today than we think it will be in the future, which is why Tesla trades at like 172 times PE. Okay, so we’re forward looking. We understand that uncertainty about the future is what causes the volatility. However, there are some things that we feel pretty good about the future. Number one, U.S. fiscal deficits, that’s the government spending more money than they’re bringing in. That’s continued to widen. That’s going to continue to grow.

Now, why do we think it’s going to continue to grow? Well, besides the fact that as Lynn Alden says, nothing stops this train. The CBO, the Congressional Budget Office, they’re the ones that set the budget for the government. They forecast that for the next 30 years. They tell us that the fiscal deficit is going to continue to increase. Number two, we know that if the fiscal deficit increases, if they continue to print more money than they bring in, that the governments must borrow more money. That’s true. So they’re going to spend more than they bring in.

That means they have to borrow money to make up the gap. That’s the debt. And then we know if they do that, the bond vigilantes, the people who are buying the bonds, they’re going to demand higher yields. They want more return for the risk that they’re taking. And if they demand higher yields, then the value of the bonds go down. This is almost certain, right? There’s only two things in life that are certain, death and taxes. I think we can add a third that governments are going to print money and they’re going to increase the debt and the bond yields are going to have to come down.

So now that we know that, or we feel pretty certain about that, what do we do? Well, we know that USTs, the US Treasuries, the full faith of the government, they will print the money and they will give it to you. But the problem is they’re going to be paid back with devalued dollars. So if you take a 30 year bond, they’re going to give you 3%, 4%, 5%, but over 30 years, what is that dollar going to be worth than 30 years from now? They’re going to pay you back with devalued dollars.

Now, the second thing we know is that because of that, gold and Bitcoin are going to outperform the risk free yield, the US Treasuries. Now, we also know that both of these are straight up better investments, meaning they’ll both go up faster than yields. But we also know it’s not just a straight up better return, it’s an actual better risk adjusted return. We just saw the math. So what does that mean? Well, if gold and Bitcoin are better returns and better risk adjusted returns, then the bond market, then what happens? Then $300 trillion that’s sitting in the bond markets will start coming over into Bitcoin and into gold.

This is exactly what the Bitcoin Treasury companies are doing. The Bitcoin Treasury companies see that there’s all this money and fixed income all around the world, pension funds, insurance funds, all these different funds. And each one of these funds, each one of these pools of liquidity has different mandates. So what the Bitcoin Treasury companies are doing are creating individual unique products that can go into each one of these pools with a specific mandate that can start to suck the liquidity out. And it will do that because again, it is both a straight up better return and is a better risk adjusted return.

Now, if you want to know more about how these Treasury companies work, you might want to watch this video right here and I’ll see you over there. [tr:trw].

See more of Mark Moss on their Public Channel and the MPN Mark Moss channel.