ETHA Could Face Deeper Losses Than FBTC Over the Next Five Years

Since January 2024, it’s hard to find a better-performing stock than Strategy (MSTR -1.25%). It’s up a mind-blowing 450%. Using a strategy to accumulate as much Bitcoin (BTC -2.60%) as it can, it has far surpassed the performance of Bitcoin, which has risen only 167%.

During the summer, Strategy (the company formerly known as MicroStrategy) soared to 450. But since mid-July, storm clouds have appeared. Strategy now trades around $350. Should investors be worried?

The Bitcoin treasury company narrative is getting stale

One reason for concern is the change in sentiment in the crypto market. Bitcoin treasury companies like Strategy once looked innovative, imaginative, and forward-looking. Now, they just look like a gimmick.

Image source: Getty Images.

Companies — many of which have never bought Bitcoin before — are now raising hundreds of millions of dollars from outside investors to buy Bitcoin. In some cases, these companies are appearing out of thin air, with the help of a little financial sleight-of-hand. All told, more than 100 companies have now reimagined themselves as Bitcoin treasury companies.

S&P 500 chart by TradingView.

Strategy pioneered the Bitcoin treasury company model in 2020. Investors were willing to pay a premium for the company because the price of Bitcoin kept going up, and Strategy kept reassuring investors that it had found a clever new way to accumulate Bitcoin on the cheap.

Is Strategy valued correctly?

Compare Strategy’s Bitcoin holdings to its market cap, and you’ll see why it may still be overvalued. The company now holds 638,985 BTC worth about $75 billion. Its current market cap is $100 billion.

There’s still a gap, but it’s shrinking. And as investors attach less of a premium to Strategy’s Bitcoin holdings, the loss of confidence could pull down the price of Strategy until the gap disappears entirely.

I generally agree with this new way of thinking. Strategy’s ability to outperform Bitcoin for such a long period of time made little sense. How long could it really out-Bitcoin Bitcoin?

For now, I’m avoiding Bitcoin treasury companies. I’d rather get my exposure to Bitcoin by holding it directly.

During a bull market, most investors get excited about chasing risk. Despite sky-high valuations, there’s a tendency to double down on even riskier bets in the hopes of making outsized gains. That’s human nature. Nobody wants to miss the boat, and everyone thinks they can outsmart the market.

In the process, boring assets like risk-free Treasury bonds usually get pushed aside. After all, who wants to buy a government bond when you can try your luck with a private AI startup or the latest growth stock darling?

But here’s the thing: I’ve been investing since 1996, and I’ve lived through multiple boom-and-bust cycles. Just when you think you can’t lose, you sometimes lose big. And just when you’re convinced the good times will never return, the market surprises you with a rebound.

The real key to being a successful DIY investor isn’t finding the perfect stock—it’s having the discipline to maintain your asset allocation. If you can reduce your emotional volatility and stick to your investing plan, you’ll build far more wealth in the long run than if you’re constantly chasing FOMO.

And that brings me to a point that often gets overlooked: Treasury bonds can appreciate in value too. Don’t sleep on them.

Why Treasuries Deserve More Respect

In a previous post, I talked about how 20-year Treasury bonds yielding ~5% were attractive for retirees or anyone who’s already financially independent and doesn’t want to trade time for money. Google News even picked it up, but the reaction was lukewarm. Most readers weren’t interested—because it’s a bull market. When stocks are roaring higher, nobody wants to hear about bonds.

But as a semi-retiree and disciplined asset allocator, I find any risk-free return above 4% to be highly attractive. Think about it: I believe in the 4% safe withdrawal rate, even though at most I’ve ever withdrawn is 2%. If I can earn 4% on my capital without touching principal, I essentially guarantee myself lifetime financial security. That peace of mind is priceless.

It also means that if my kids end up getting rejected from college and can’t find jobs, they’ll still inherit plenty. Worst case, they can sit around playing video games in the paid-off homes I bought for them before they were born. Not ideal, but at least they won’t starve.

Because I practice what I preach, I bought $150,000 worth of 10-year Treasury bonds yielding 4.25% at the end of June on the secondary market. I’d love to lock up 30–40% of my taxable portfolio in Treasuries yielding at least 4%. That gives me a steady foundation of risk-free income, while still leaving 60–70% of the portfolio available for riskier investments like stocks.

For context, this taxable portfolio is what my wife and I rely on to fund our lives as dual unemployed parents. Stability and income are priorities. For me, that’s the ideal setup in retirement.

The Overlooked Free “Call Option” in Bonds

When most people think of Treasury bonds, they imagine clipping coupons and getting their principal back at maturity. And that’s exactly what happens—you earn steady income, and there’s zero default risk. That’s why they’re called “risk-free.”

But here’s what many investors forget: long-duration Treasury bonds come with a free call option.

If interest rates fall, the market value of your bond rises. You don’t have to sell, but you have the option to. That flexibility is powerful.

• Hold to maturity → collect coupon payments and get all your money back.
• Sell before maturity → potentially lock in capital gains if rates have dropped.

This makes long-term Treasuries a two-for-one investment: you get steady income plus upside potential if rates decline.

My Treasury Bond in Action

The $150,542 worth of 10-year Treasuries I bought in June 2025 are already worth about $154,529—a 2.64% gain in just two-and-a-half months as Treasury bond yields have come down. That’s without even counting coupon payments.

I made the investment during a similar time I invested a total of about $100,000 in Fundrise Venture, as part of my dumbbell investing strategy. The vast majority of the proceeds came from selling my old house at a profit.

These bonds pay a 4.25% coupon semi-annually. That’s about $3,199 every six months, like clockwork. I’ll keep getting those payments until May 15, 2035, when the bond matures and I get my $150,542 back in full.

Earning guaranteed money while doing nothing feels like a dream come true, especially now that I’m growing tired of being a landlord. I’m thankful to my younger self for diligently saving and investing 50%+ of my income for 13 years.

But let’s run some scenarios:

• Rates drop 1% (from 4.25% to 3.25%) over two years.
  My bond suddenly looks far more attractive. New buyers would only get 3.25% from a fresh 10-year, while mine pays 4.25%. The market adjusts by bidding up my bond’s price by roughly 6.5%. On $150,542, that’s ~$9,785 in gains. Add in two years of coupon payments ($6,398), and I’d be up around $16,183—a 10.75% return, risk-free.
• Rates rise 1% (from 4.25% to 5.25%) over two years.
  My bond would decline about 5.2% in value. That sounds bad for a risk-free investment, but here’s the plan: if I just hold until maturity, I still get all my coupons and my principal back. In the meantime, I’d happily buy new Treasuries at 5.25% to lock in even more passive income.

That’s the beauty of Treasuries. Either way, you or I win. Sure, there’s inflation to contend with. However, every investment contends with inflation to calculate a real rate of return.

Do note that you do have to pay capital gains tax for both federal and state if you sell before maturity and have a gain. However, interest is subject only to federal income taxes, not state and local taxes if you hold until maturity.

How Much Treasury Bonds Can Appreciate Per Interest Rate Decline

Here’s a look at how a 10-year Treasury bond (4.5% coupon, $1,000 face value) increases in value for each 25 basis point decline in yield:

• 25 bps decline (4.50% → 4.25%): $1,020 (+2.0%)
• 50 bps decline (4.50% → 4.00%): $1,041 (+4.1%)
• 75 bps decline (4.50% → 3.75%): $1,062 (+6.2%)
• 100 bps decline (4.50% → 3.50%): $1,083 (+8.3%)
• 125 bps decline (4.50% → 3.25%): $1,105 (+10.5%)
• 150 bps decline (4.50% → 3.00%): $1,127 (+12.7%)
• 175 bps decline (4.50% → 2.75%): $1,150 (+15.0%)
• 200 bps decline (4.50% → 2.50%): $1,174 (+17.4%)
• 225 bps decline (4.50% → 2.25%): $1,198 (+19.8%)
• 250 bps decline (4.50% → 2.00%): $1,223 (+22.3%)
• 275 bps decline (4.50% → 1.75%): $1,248 (+24.8%)
• 300 bps decline (4.50% → 1.50%): $1,274 (+27.4%)
• 325 bps decline (4.50% → 1.25%): $1,301 (+30.1%)
• 350 bps decline (4.50% → 1.00%): $1,329 (+32.9%)
• 375 bps decline (4.50% → 0.75%): $1,357 (+35.7%)
• 400 bps decline (4.50% → 0.50%): $1,386 (+38.6%)

In other words, if the 10-year Treasury yield falls to 0.6%—its all-time low in March 2020—your 10-year Treasury bond could increase in value by 35% to 40%. More realistically, if yields drop to around 3%–3.5%, you could see roughly 8%–13% in price appreciation on top of the regular coupon payments. Not bad!

Why Higher Yields Are a Gift

The higher rates go, the more excited I get. That may sound strange, but here’s why: I believe the long-term trend for inflation and interest rates is down.

Technology, productivity gains, global coordination, and lessons from past cycles all act as long-term deflationary forces. These should eventually bring interest rates lower. Further, with the Fed restarting its rate cuts, I’m not sure today’s 4% – 5%-risk-free yields may not be around forever.

This is why I’m buying now. Locking in these yields feels like a gift to my future self who might no longer want to lift another finger writing posts to help all of you build more wealth and live freer lives.

Beyond Treasuries, I’m investing more in real estate again as they act like a bond plus investment. In other words, real estate has more upside during a declining interest rate environment, while also providing some downside protection from stocks.

Stocks + Treasuries: The Golden Combo

Right now, investors have the best of both worlds:

1. A bull market in stocks.
2. Still high risk-free yields in Treasuries.

That combination doesn’t come around often. But when it does, it is a dream come true for anybody who is FIRE.

When I retired in 2012 with about a $3 million net worth, I felt content with that amount, so I logically said goodbye to long hours. Remember, you’re not really financially independent if you do nothing to change a suboptimal situation. At the time, the stock market felt dicey, and bond yields were ho-hum at 1.5% – 2%. Fast forward to today: the stock market is multiple times higher, and yields are more than double. Talk about a fortunate setup.

Let’s do a thought experiment. Suppose you’ve diligently saved and invested 50%+ of your income for 30 years. Now you’ve got a $10 million portfolio: $6 million in the S&P 500 and $4 million in Treasuries yielding 4%.

• Stocks at 7% return → $420,000.
• Treasuries at 4% → $160,000.

That’s $580,000 of income a year before taxes, on a $350,000 annual spending budget. You wouldn’t even have to touch principal. If there’s another 20% bear market, as there likely will be, your portfolio will only decline by about 11%. Over the long term, your net worth would just keep compounding until you pass away with far more money than you’ll ever need.

Don’t Underestimate Treasuries

It’s easy to dismiss Treasuries as boring compared to AI startups or meme stocks. But that would be a mistake. They provide steady income, reduce portfolio volatility, and—if rates drop—they can deliver meaningful capital gains.

They’re not flashy, but they don’t need to be. Boring is beautiful when it comes to financial security.

So the next time you’re tempted to overlook Treasuries, remember: they can appreciate in value too. Sometimes, the least exciting investments are the ones that quietly build lasting wealth.

Readers, what are your thoughts on investing in Treasury bonds yielding 4% or more? Do you believe inflation and interest rates are headed lower, or will they rebound higher? And were you aware that Treasuries can also appreciate in value—not just pay steady income?

Suggestions To Build More Wealth

If you believe interest rates will trend lower over the next several years—as I do—investing in bonds and real estate can make a lot of sense. Beyond Treasury bonds, you might consider Fundrise, a private real estate platform managing over $3 billion in assets for more than 380,000 investors. Its portfolio of residential and industrial commercial properties is well-positioned to benefit in a declining rate environment.

Listen and subscribe to The Financial Samurai podcast on Apple or Spotify. I interview experts in their respective fields and discuss some of the most interesting topics on this site. Your shares, ratings, and reviews are appreciated.

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I haven’t checked my net worth for four months until recently. That wasn’t on purpose, because normally, since 2012, I check at least three times a week using Empower’s free app. The only reason I stopped was because I could no longer log in.

One day, I was suddenly locked out of the app. I tried to log in on my laptop instead. Same result. My password, which I hadn’t changed, no longer worked. No big deal, I thought. I’d just reset it. Except every time I went through the reset process, I’d get an email confirming the change, then immediately get a warning that the new password didn’t work and that I’d be locked out for 24 hours after two more attempts. After five rounds of this circus over a month, I gave up.

Although I appreciated the seriousness of Empower’s security, I was frustrated. Life was busy. Summer rolled around. I took the family to Honolulu for five weeks. Once school started for my kids on August 27, I finally decided it was time to call the helpline (1-877-216-4014, for anyone who finds themselves in my shoes).

After a 7-minute call, I was back in action. The support rep explained that Empower had migrated dashboards to a new system, and some accounts like mine got stuck in a loop. All I had to do was unregister, then re-register with my existing Social Security number and zip code, and voilà—I was back in with all my existing linked accounts.

Didn’t Have A Great Urge To Check My Net Worth

What surprised me most wasn’t that it took four months to fix. It was that I didn’t feel a strong urge to fix it right away. If I really wanted to, I could have called the helpline immediately.

It’s not like my net worth was going to vanish just because I wasn’t looking at it. I knew the rough numbers in my head already—my equity exposure, my bond allocation, my real estate value, and so forth. Plus, when the market was tanking in April 2025, I wasn’t itching to see the damage anyway. Sometimes, not looking is the best way to stay calm.

It reminded me of social media: the less time you spend scrolling X, Instagram, or Facebook, the happier you tend to be. Checking your net worth too often can be the same type of mental junk food, so I experimented with staying away. Unless you receive a significant financial windfall, your net worth isn’t changing much from day to day.

That said, the four-plus months off taught me something valuable. There are real benefits to not regularly checking your net worth.

The Five Benefits Of Not Checking Your Net Worth Regularly

Here are five that stood out most.

1. Lower Stress And Anxiety

When markets are down, staring at your net worth daily is like poking at a bruise, it only makes the pain worse.

In March and April, the S&P 500 dropped sharply, and bonds weren’t helping much either. Had I been logging in every morning, I would have watched hundreds of thousands in paper losses pile up. Instead, by not logging in, I avoided the day-to-day sting.

It’s like weighing yourself every day when you’re trying to lose weight. If you fluctuate up and down, it’s demoralizing. But if you only check once a month, you’re more likely to see the real trend and less likely to quit.

Not checking your net worth regularly protects your mental health. You still know roughly where you stand, but you aren’t constantly reminding yourself of volatility you can’t control.

2. More Focus On What Actually Matters

When I wasn’t checking my net worth, I noticed my energy went elsewhere: my kids, my writing, my time in Honolulu visiting my parents. Instead of being distracted by a green or red number on a screen, I was more present. Of course, I still had the urge to check my investment accounts individually from time to time.

Every time you check your finances, you use up some of your limited daily attention. If you check three times a week like I usually do, that’s over 150 mental interruptions a year. Multiply that by decades, and you realize how much headspace you’ve given up.

By not checking, I was forced to focus on what I could control: working on new articles, being with family, and staying healthy. In the end, isn’t that why we’re building wealth in the first place?

3. Helps Break Your Money Addiction

Let’s be frank, tracking net worth can feel addictive. The little dopamine hit from seeing your portfolio go up is real. It’s why some of us like to gamble. But like all addictions, there’s a cost.

When your mood is tied too closely to whether the market is up or down, you’ve given away control of your happiness. That’s dangerous. Unfortunately, I’m always moodier when the stock market is correcting because I’m in charge of the family’s finances. When the finances are going backwards, I can’t help feel like a failure for not better safeguarding our main source of freedom.

By taking four months off, I broke that cycle. I rediscovered that I could go weeks without knowing my “score,” and life went on just fine. My relationships didn’t suffer. My cash flow didn’t dry up. The world didn’t end.

4. Prevents Knee-Jerk Reactions That Could Lose You Money

One of the biggest dangers of constantly checking your finances is the temptation to unnecessarily tinker. You see your portfolio drop and suddenly you want to sell (or buy the dip). You see a hot IPO go up 333% on the first day, and due to intense FOMO, you want to buy at the top.

As the old saying goes, “Time in the market is more powerful than timing the market.” The less you check your net worth and investment portfolios, the less temptation you will have to trade.

This type of overactivity often leads to worse long-term returns. The best investors are usually the ones who set up an allocation and then largely leave it alone.

By not regularly looking for four months, I gave myself a natural “cooling off” period. I wasn’t tempted to make drastic investment decisions. My portfolio allocation stayed largely intact, which is exactly how compounding works best.

Think of it like a farmer. If you dig up your seeds every week to check on them, they’ll never grow. Sometimes, the best move is to leave things buried and let nature do its thing.

5. A Chance To Test Financial Independence

The ultimate goal of financial independence is to not worry about money all the time. You want to money money in the background so you can spend time doing the things you really enjoy. If you need to track your net worth daily just to feel secure, you’re not truly free.

During my four-month break, I got an unfamiliar preview of what it feels like to live without constantly measuring. My bills were still paid. My investments still grew (or shrank). Life speed kept accelerating. Our money was taking care of our family, as intended. The less time I spent managing our money, the more rewarding the money felt.

If you want to know whether you’re really financially secure, try not checking your net worth for at least a quarter. If you find yourself panicking, you may be too dependent on external validation. But if you find yourself relaxed, you’re probably in good shape.

This test is powerful. It shows you whether you’ve built a fortress solid enough that you can step away without fear. That’s real independence.

Striking A Balance When Tracking Your Wealth

When you finally check your net worth months later, you might be pleasantly surprised to see a bigger jump in wealth than you expected. It’s like seeing other people’s kids after summer break. Their growth feels dramatic because you weren’t watching them inch taller every day. Parents, on the other hand, often hardly notice the change.

After four months away, I’m back to tracking my net worth closely. Old habits die hard, and I still believe there’s value in keeping an eye on things, especially for someone like me, who writes about personal finance for a living.

I was happy to finally update the amounts in three private venture capital funds, which had $60,000 worth of capital calls during these four months. I also logged the additional $100,000 I invested in the Fundrise Innovation Fund this year. Private funds are manually tracked in the Empower dashboard.

This time off taught me that balance is key. For most people, checking once or twice a month is ideal. It keeps you informed without letting the numbers dominate your mood.

Personally, I’m aiming to scale back from three times a week to just once a week. One practical trick? Move the Empower app off your home screen and bury it on page three or four of your phone so you’re not tempted to tap it out of habit.

Don’t Let Your Net Worth Control You

If you’re in debt or working toward a savings milestone, you might check more frequently for motivation. If you’re already retired or financially independent, you can afford to check less. The important thing is making sure you control the numbers, not the other way around.

I never planned on taking a four-month break from checking my net worth. But thanks to a stubborn login issue plus my own disinterest, I got the unexpected chance to experience life without my usual financial dashboard. And you know what? It was liberating.

If you’re someone who refreshes your portfolio daily, try taking a step back. Go a week, a month, or even four months without looking.

You may find, like I did, that the less you check, the more you actually enjoy your wealth.

Readers, how often do you check your net worth? Do you believe there’s a strong correlation between frequency and results? After all, people who are obsessed with something often end up getting better at it.

Get A Free Financial Analysis Offer From Empower

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A fresh set of eyes could uncover hidden fees, inefficient allocations, or opportunities to optimize—giving you greater clarity and confidence in your financial plan.

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Listen and subscribe to The Financial Samurai podcast on Apple or Spotify. I interview experts in their respective fields and discuss some of the most interesting topics on this site. Your shares, ratings, and reviews are appreciated.

To expedite your journey to financial freedom, join over 60,000 others and subscribe to the free Financial Samurai newsletter. You can also get my posts in your e-mail inbox as soon as they come out by signing up here.

Financial Samurai is among the largest independently-owned personal finance websites, established in 2009. Everything is written based on firsthand experience and expertise.

Nick wants to set up an investment account for his nephew to contribute annually, creating a nest egg for college since the parents are already opening a 529. He’s unsure whether a standard brokerage account, IRA or other options work best when you’re not the parent.

Diana asks whether she needs TIPS in her portfolio to protect against inflation. Or can she just rely on other investments that outpace inflation?

She’s also wondering about the tax implications of TIPS ETFs. This matters during her peak earning years.

Prethive asks whether he should switch from Roth to Traditional 401(k) contributions. When he retires, he wants to move to a tax-free state. Or maybe move abroad.

He wonders if moving to avoid state taxes in retirement would save more money long-term.

__________________________________________________________________________

Nick: What’s the best way to set up an investment account as a gift for my nephew? Should I go with a standard brokerage account? An IRA? Or what other options do I have since I’m not his parent?

I recently became an uncle and want to give my nephew an investment account that I can contribute to year over year, creating a nest egg for when he gets to college. His parents are already opening a 529 for him, so I was considering a standard brokerage account but wasn’t sure if that’s the optimal approach.

Diana: Do I need a TIPS ETF in my portfolio to protect my retirement savings from inflation? And if TIPS are the way to go, what should people in their peak earning years do to deal with the tax implications?

I’m wondering if I can compensate for inflation simply by adjusting the rest of my portfolio to investments that return at a rate exceeding inflation. I’m sort of confused by this strategy versus using Treasury Inflation-Protected Securities.

Prethive: Should I be choosing a traditional or Roth 401(k) when it comes to state taxes? What happens with state taxes on a pre-tax 401(k) if someone moves abroad? Could this geographic tax strategy really add up to significant savings over time?

Some states don’t tax income at all, while others specifically don’t tax retirement income. So what if people just do pre-tax contributions their whole career, then strategically move to one of these tax-friendly states when they retire? 

If someone lives in a no-tax state, then decides to retire overseas, would they essentially escape state taxes entirely? Right now we’re in the 12% tax bracket and have been doing Roth contributions, but I’m wondering if we should switch to pre-tax contributions and then make our retirement move to a tax-friendly state or even retire abroad.

Is this worth the mental energy, or should I just stick with Roth contributions?

Resources Mentioned:

affordanything.com/assetlocation
treasurydirect.gov
stackingbenjamins.com/hsa
Interview with Nick Maggiulli about the wealth ladder

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