A Tale of Two Asset Classes

Five years ago, during the pandemic, the bond market hit record-low yields. At one point, the 10-year U.S. Treasury bond paid a scant 0.318% yield.

Today’s 10-year bond buyers? 4.51%.

For $10,000, that’s a more than ten-fold difference between getting paid $31.80 in annual interest versus $451.

Bonds have been a poor asset, especially longer-dated ones. The iShares 20+ Year Treasury Bond ETF, TLT, is down over 50% since 2020.

Let’s contrast that return with bitcoin.

Over the past five years, whether interest rates have been low or high, whether central banks have been flooding the system or not – bitcoin has soared over 1,100%.

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This week, soon-to-retire JPMorgan Chase CEO Jamie Dimon graciously announced that the bank would allow its customers to buy crypto.

That’s after a 1,100% move. And after bonds, which the bank is more than happy to deal in, have been cut in half.

When it comes to crypto, asking a bank about it is like asking a taxi driver what they think of Uber.

There’s a monetary regime change underway. And bitcoin could allow investors to come out ahead – whatever happens – and whoever ends up on top.

~ Addison

Five years ago, during the pandemic, the bond market hit record-low yields. At one point, the 10-year U.S. Treasury bond paid a scant 0.318% yield.

Today’s 10-year bond buyers? 4.51%.

For $10,000, that’s a more than ten-fold difference between getting paid $31.80 in annual interest versus $451.

Bonds have been a poor asset, especially longer-dated ones. The iShares 20+ Year Treasury Bond ETF, TLT, is down over 50% since 2020.

Let’s contrast that return with bitcoin.

Over the past five years, whether interest rates have been low or high, whether central banks have been flooding the system or not – bitcoin has soared over 1,100%.

Turn Your Images On

This week, soon-to-retire JPMorgan Chase CEO Jamie Dimon graciously announced that the bank would allow its customers to buy crypto.

That’s after a 1,100% move. And after bonds, which the bank is more than happy to deal in, have been cut in half.

When it comes to crypto, asking a bank about it is like asking a taxi driver what they think of Uber.

There’s a monetary regime change underway. And bitcoin could allow investors to come out ahead – whatever happens – and whoever ends up on top.

~ Addison

Debts and deficits will eventually cause a crisis. Treasury Secretary Scott Bessent’s effort to help bail out the Japanese Yen this week is entirely motivated by self-preservation. The contagion signal flashing in Japanese bonds since late ‘25 is infecting the BOJ, which may be forced to sell U.S. Treasurys to stabilize its own currency.

The copper price is no doubt benefiting from inflation driven by money printing. But the doc don’t lie. Copper’s new all-time highs, while gold and silver still languish, are a sign the AI growth story is also that of the global economy itself.

Many miners were profitable with gold around $2,000 and silver near $50. At sustained prices closer to $4,000 gold and $60 silver, the arithmetic changes dramatically.

The stock market is getting an unexpected boost to kick off August, bucking the historically weak summer session for the U.S. stock market.

What’s happening? The Bank of Japan and the U.S. Treasury are making a coordinated effort to support Japanese yen; a move last attempted nearly 30 years in the height of the Asian Financial contagion (1998).

Many miners were profitable with gold around $2,000 and silver near $50. At sustained prices closer to $4,000 gold and $60 silver, the arithmetic changes dramatically.

The stock market is getting an unexpected boost to kick off August, bucking the historically weak summer session for the U.S. stock market.