Bloomberg Intelligence senior macro strategist Mike McGlone has warned that 5% yields on U.S. government bonds could trigger a rotation out of Bitcoin and gold. The assessment came after the Federal Reserve raised its benchmark interest rate by another 25 basis points on Sept. 16, 2026, to a range of 3.75%-4%, while the 10-year Treasury yield moved close to the psychological 5% level.
McGlone described the current environment as an endgame for risk assets. He noted that the Bloomberg Commodity Spot Index to long-term bonds ratio is at extremes last seen in 1990, a setup that historically preceded severe recessions and lower rates. Unlike past cycles, he said, the Fed is still tightening financial conditions, increasing the risk of a break in global markets. He argued that when the U.S. government offers a fixed 5% annual return, the logic of holding alternative assets changes: gold loses appeal because it has no coupon income, while Bitcoin trades as a high-risk asset amid scarce liquidity.
Separately, Bloomberg senior ETF analyst Eric Balchunas offered a more bullish long-term view, saying Bitcoin ETFs could eventually triple gold ETF assets. He clarified on Friday that such a scenario would put BTC assets under management at $300 billion to $400 billion. Balchunas cited a younger investor base, growing institutional adoption, and more marketing enthusiasm as key drivers. He said Bitcoin is like gold as a teenager, while gold is 5,000 years old and was mentioned hundreds of times in the Bible. Volatility remains the main obstacle for major institutions, but he predicted that an inflection moment could occur when large investors begin treating Bitcoin as a reliable store of value or portfolio diversifier.
