BlackRock Warns Investors on Bonds, Highlights Crypto as Alternative

• BlackRock highlights Japan’s ultra-long Government Bonds selloff and its own underweight stance. 
• BlackRock’s year-to-date returns show selected alternative assets, including Bitcoin, outperforming traditional bonds.

BlackRock, the asset manager, noted that long-term government bonds are losing their effectiveness as a portfolio safety net, particularly amid Japan’s bond market volatility, which pushes some institutional allocators to treat liquid digital assets as the new component of diversified portfolios, where Bitcoin is seen as an alternative risk exposure.

Japan’s Bond Market in Focus

In a weekly commentary, BlackRock focuses on Japan, where that country’s government bond yields jumped recently, and 30‑ and 40‑year JGB yields saw historic increases.  When yields rise, bond prices fall.  With that, JGB’s sold off sharply this month, driven by rising interest rates, geopolitical tensions, and renewed U.S. tariff threats. 

As a result, bonds are no longer reliable portfolios, and BlackRock mentioned that it maintains an underweight position in Japanese Government Bonds in December 2025, while noting that higher yields do not fully offset the risks associated with duration and price drop.

With that, BlackRock favors alternative income, which has high-yield, short-term credit, mortgage-backed securities, and emerging-market debt, while private lending targets strong, established borrowers.

Crypto Assets Fill the Gap

Against this backdrop of weakening bond performance, attention is increasingly turning to assets outside the traditional fixed-income. 

From this, Assets in review chart of the same weekly commentary, Bitcoin is one of the top-performing assets in 2026, so far. Its year-to-date return sits around approximately 4%, outperforming U.S. equities, European equities, Global corporate investment-grade bonds, and Government bonds, but it also shows much larger price swings than bonds or equities. 
In contrast, government bonds sit near zero or negative returns, reinforcing the idea that traditional safe assets are lagging. With that, currently  Bitcoin is trading near $87,797. 15 with 1.63% down, but the daily trading volume increases 13.32%.

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