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BlackRock warns long-term government bonds have lost their safety role, pushing investors to consider Bitcoin, Ethereum and Solana as alternative risk plays. Summary BlackRock says long-term government bonds no longer act as reliable portfolio ballast as deficits and policy shocks drive correlated drawdowns. The firm highlights Japan’s ultra-long JGB selloff and its own underweight stance in long-duration JGBs and U.S. Treasuries, arguing the classic 60/40 playbook is breaking. With Bitcoin, Ethereum and Solana trading near cycle highs, some institutions now treat major cryptocurrencies as the convex risk exposure once assigned to sovereign debt. BlackRock is telling clients to stop treating government bonds as the automatic safety net in a crisis—a shift with direct implications for how capital rotates into risk assets like Bitcoin (BTC) and Ether (ETH).​ Bonds Lose Their “Ballast” Role In its latest weekly note, the BlackRock Investment Institute warns that “bonds no longer provide the same level of portfolio ballast” as fiscal deficits balloon and rates stay higher for longer. Heavier government borrowing and “higher-for-longer” policy have made long-dated sovereigns more vulnerable to abrupt selloffs when “fiscal and trade risks flare up,” the team led by Jean Boivin argues. Instead of cushioning equity drawdowns, spikes in long-term yields are increasingly “morphing into debt-sustainability worries,” amplifying volatility across assets. BlackRock frames the recent moves in rates less as a classic growth‑inflation story and more as politics colliding with what it calls “immutable” constraints, above all the need for foreign buyers to keep absorbing ever-rising debt issuance. When that foreign bid thins, duration ceases to be a hedge and starts behaving like a second source of risk.​ Japan As Warning Signal Japan has become the pressure point where these abstract risks turn concrete. Ultra‑long Japanese government bonds sold off sharply this month, with the 40‑year yield briefly pushing above…

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Filed under: News - @ January 29, 2026 4:27 pm