Why Bitcoin Is Replacing US Treasuries as the True "Risk-Free" Asset
When we talk about a "risk-free" asset in finance, we're referring to something with virtually zero chance of default—an investment so reliable it sets the benchmark for assessing all others. For decades, U.S. Treasuries have held that coveted position. Both institutional investors and sovereign wealth funds have viewed them as the ultimate safe haven. But as global conditions evolve, this once rock-solid assumption is coming under scrutiny.
America's debt levels are spiraling, having surpassed $34 trillion in 2024, and the likelihood of ever-paying them off outright is fading fast. This is an existential threat to the dominance of the U.S. dollar. As deficits balloon and the possibility of future currency devaluation looms, the very premise of Treasuries being "risk-free" begins to crack. While Treasuries are still backed by the "full faith and credit" of the U.S. government, that faith faces unprecedented tests as political gridlock, inflation, and constant borrowing combine to undermine confidence in that creditworthiness.
That's where Bitcoin comes in. Unlike fiat currencies, which governments can inflate at will, Bitcoin's mathematical principles ensure its supply is capped at 21 million coins—no exceptions, no compromises. Its decentralized network spans the globe, reducing dependence on any one country's political stability or fiscal health. Critics argue that Bitcoin's volatility disqualifies it from "risk-free" status, but this view misses a crucial point: volatility is decreasing as adoption increases. Over its history, Bitcoin has weathered economic crises and demonstrated steady adoption, proving its resilience in an unpredictable world.
The traditional concept of "risk-free" is being redefined before our eyes. If you're seeking refuge from potential currency devaluation, unchecked money printing, and mounting fiscal challenges, the question isn't whether U.S. Treasuries will remain supreme—it's when they'll be displaced. Bitcoin's foundation—immutable scarcity, decentralized security, and a global user base—stands in stark contrast to the political and economic headwinds buffeting traditional assets.
As the United States grapples with the consequences of runaway spending, Bitcoin's proposition as the world's first truly neutral reserve asset grows stronger by the day. Perhaps the future of "risk-free" may no longer be tied to a nation—but to an incorruptible network governed by code, not politics.
What’s the long-term value of Bitcoin?
If Bitcoin became the primary store of wealth, we’d see three asset categories:
1. Non-productive assets (homes, cars, art) – No yield, purely for use or consumption.
2. Passive wealth (Bitcoin) – Appreciates with global growth; effectively risk-free.
3. Productive assets (factories, farms, real estate) – Yield above baseline growth to offset risk.
Out of $1 quadrillion in total global wealth, how much flows into “passive wealth”? Combine today’s broad money ($100–$200T), gold ($15T), and the “monetary premium” baked into real estate and other assets.
You could easily reach $200–$400T in Bitcoin, implying $10–$19 million per BTC. Add some more considering about 25% of Bitcoin is lost.
It’s a wild thought experiment, but that’s the math if Bitcoin captures the world’s monetary premium.