Bonds Beat Bitcoin This Year While Traders Navigate Volatility
Here's an uncomfortable truth for crypto believers: boring government bonds have crushed Bitcoin in 2025.
Quick overview
- In 2025, government bonds have outperformed Bitcoin, with BTC down 7% year-to-date while the U.S. 10-year Treasury is up 2.5%.
- The strength of the 10-year Treasury indicates negative market sentiment for riskier assets like stocks and crypto.
- Current options activity shows uncertainty in the market, with traders hedging bets in both directions due to mixed macro signals.
- New U.S. banking rules may provide some stability by allowing banks more room to lend, but the overall outlook remains unfavorable for crypto.
Here’s an uncomfortable truth for crypto believers: boring government bonds have crushed Bitcoin in 2025. BTC is down 7% year-to-date. The U.S. 10-year Treasury? Up 2.5%.
That means anyone who put their money in fixed income instead of crypto made the right call, despite all those corporate BTC purchases by digital asset treasuries. Not what the maximalists want to hear.
The bigger issue is what the 10-year’s strength tells you about market sentiment. When a traditional safe haven outperforms like this, it’s usually bad news for riskier stuff like stocks and crypto. We talked about this last week: institutional money flowing out of spot bitcoin ETFs could be signaling trouble ahead on the macro front.
Things could shift before year-end, sure. If the Fed cuts rates by 25 basis points in December and sounds dovish about it, the Dollar Index might drop and give risk assets some breathing room. But right now? The DXY looks like it’s setting up camp above its 200-day moving average, ignoring all the dovish Fed speculation.
Options activity isn’t helping anyone figure out where prices go next. Earlier this week, someone bought heavy protection at the $80,000 put strike. Then a massive block trade showed up betting Bitcoin could break back above $100,000 by year-end. Tuesday brought a $220,000 call purchase that looked bullish until you noticed the buyer also grabbed $40,000 calls. Greeks.Live told CoinDesk that’s a volatility play, not a directional bet.
Translation: Nobody knows what’s happening, so they’re betting on big moves in either direction.
The near-term setup feels messy. Prices are choppy, macro signals are mixed, and options traders are hedging both ways. Not exactly the environment where you want to take big swings.
There is one bright spot that hasn’t gotten much attention. New U.S. banking rules just dropped capital requirements for low-risk assets like Treasuries. Banks get more room to lend. Bond dealers can jump in easier when markets get shaky. If volatility spikes, that might help keep things from falling apart.
For now though, the scorecard is clear. Bonds won 2025. Crypto didn’t. And until something changes with Fed policy or the dollar weakens, that dynamic probably sticks around.
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