US Bonds Post Worst 10-Year Return in 223 Years; Bitcoin Tested by Rising Yields

Investors who purchased long-term US Treasury bonds a decade ago are sitting on a loss, even before adjusting for inflation. Over 223 years of data, this has occurred just one other time.

According to Bank of America, long-term Treasury bonds declined by about 2% annually in the ten years through August 2026. The previous comparable period concluded in 1803, when the US government borrowed funds for the Louisiana Purchase.

U.S. bonds are now in one of their worst stretches in more than 200 years.

As of July 2026, the rolling 10-year annualized return for U.S. bonds after inflation was -5.14%.

That’s worse than the aftermath of the Civil War, the Great Depression and the inflationary 1970s.

The… pic.twitter.com/SdcdqFDb5S

— TreasuryBonds.com (@TreasuryBonds1) September 7, 2026

World's Safest Investment Has Lost Its Luster

A bond's return is limited to its fixed coupon. On this date in 2016, the 30-year Treasury yielded 2.32%, per Treasury Department data. That was the maximum return.

Inflation subsequently rose, the Fed increased rates, and yields moved higher. Bond prices dropped sufficiently to erase the coupon.

The dataset begins in 1793 and contains 2,771 monthly observations, assembled by Edward McQuarrie, a finance professor at Santa Clara University. Among those months, 25 show negative 10-year returns, and Bianco Research notes that 24 of those are in the current period.

“Bonds WERE the worst investment in American history. It says nothing about what they do next,” wrote Jim Bianco, founder of Bianco Research.

Bitcoin Faces a Competition It Has Never Encountered

According to Bianco Research's analysis, the initial yield largely determines the subsequent decade's return. Purchasing at 2% leads to roughly 2% annualized, while buying at 5.25% historically suggests near 5%.

2/3

Why so bad? You buy a bond for its yield. Ten years ago, the long Treasury paid 2%. That was the ceiling, and then rates rose (price losses), taking even that away.

Some perspective: in 223 years, a negative 10-year return has happened in 25 months. 24 of them are right… pic.twitter.com/31NxE8zdTJ

— Jim Bianco (@biancoresearch) September 6, 2026

This scenario is unprecedented for Bitcoin. The Federal Reserve reduced rates to near zero on December 16, 2008, and Bitcoin's genesis block was mined 18 days afterward.

Low interest rates were the environment in which Bitcoin thrived. Currently, the 10-year Treasury yields 4.80% and the 30-year yields 5.25%, both as of Tuesday.

Bitcoin offers no yield. It is trading near $77,934, roughly 2% lower and far below its 2025 peak. Last week, BeInCrypto noted that global bond yields reached levels not seen since 2008, signaling a squeeze.

The Uncomfortable Reality

The irony is that the turmoil making bonds appealing is the same turmoil Bitcoin supporters point to.

Yields are elevated because the US government borrows at a pace that worries creditors. Federal debt reached $40.1 trillion on September 3, according to Treasury data, and the debt mountain expands with each auction. Oil prices above $100 sustain sticky inflation.

Capital is not exiting either. US spot Bitcoin funds attracted $987.7 million in the week through September 4, according to Farside, and Bitcoin ETF inflows outpaced all other crypto funds. On Polymarket, traders assign a 52% probability to a September rate hike.

When cash yielded nothing, holding Bitcoin was simple. The challenge now is whether it can outperform 5% annual returns over ten years. Friday's inflation report will begin to provide the answer.