Investors are increasingly turning to Bitcoin instead of sovereign bonds due to a changing economic landscape and Bitcoin's unique characteristics. Traditionally, assets like US Treasurys were deemed low-risk, but the rise of Bitcoin over the past 13 years has altered this perspective. Factors influencing this shift include the impact of the Federal Reserve's balance sheet on money supply, interest rates, and CEO sentiments, with prominent investors advocating Bitcoin as a hedge against inflation. In 2024, the SEC approved multiple Bitcoin spot ETFs, significantly boosting Bitcoin’s presence in investment portfolios. Historical performance shows Bitcoin has outperformed traditional assets, with gains of 375.5% over three years compared to more modest returns from stocks and gold. Bitcoin's fixed supply of 21 million coins and 24/7 market accessibility further enhance its appeal. In contrast, government bonds have limited access and liquidity issues. Notably, major investors like Larry Fink and Stanley Druckenmiller are leaning towards Bitcoin, indicating a significant potential shift in institutional preferences.

Source 🔗