US Treasury bond ETFs lose half their value against surging Bitcoin

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US Treasury ETFs decline against Bitcoin highlights digital asset dominance in 2024.

US Treasury bonds, tracked via their equivalent US ETFs, have significantly underperformed Bitcoin in 2024. The TLT iShares 20+ Year Treasury Bond ETF (20+ years) declined by 8.16% year-to-date, but when compared to Bitcoin, it lost 52.16% of its value. Similarly, the GOVT iShares US Treasury Bond ETF (1 to 30 years) fell 51.88% against Bitcoin, and the VGSH Vanguard Short-Term Treasury ETF (1 to 3 years) decreased by 51.14% relative to BTC.

Bitcoin vs US Treasuries (Source: TradingView)

These ETFs represent different maturities of US Treasury bonds: TLT focuses on long-term bonds, GOVT covers a broad spectrum of maturities, and VGSH concentrates on short-term bonds. The across-the-board underperformance highlights how Bitcoin has outpaced traditional government debt instruments this year.

Bitcoin’s appreciation, especially after its halving event in April and a surge following the November election, has widened the performance gap. While US Treasury ETFs experienced modest declines of 8% on their own, their value depreciated substantially when measured against Bitcoin.

TLT began to decline in September in the lead-up to the US Election but declined much further against Bitcoin as it surged to almost $90,000. Prior to Bitcoin’s November ascent, Treasuries were down around 36% against BTC.

This trend emphasizes a shift in investment trends, with digital assets gaining traction over traditional fixed-income securities. During 2024, investors holding US Treasury ETFs faced significant opportunity costs compared to those invested in Bitcoin.