Bank of America: $2.3 billion flowed into the crypto market last week, reaching a new cumulative high.

GateUser-6433627c · 2025-05-27T07:42:25+00:00

Michael Hartnett, Chief Strategist at Bank of America, pointed out in the latest report that the high spending by the U.S. government will lead to rising U.S. Treasury yields and a depreciation of the dollar, posing Unfavourable Information for risk assets. Recently, the inflow into Crypto Assets has reached a record high, while tech stocks have seen outflows and high-yield bonds have seen inflows; if long-term U.S. Treasuries collapse, the U.S. stock market will face a crisis. When the 5-year U.S. Treasury yield exceeds 3.25%, the interest payments in the U.S. will accelerate deterioration.

GateUser-6433627c

2025-05-27 07:42:25

Abstract generation in progress

On May 27, Bank of America Chief Strategist Michael Hartnett was as sharp as ever in his latest report: If you spend $100 per second, it would take 2,248 years to cover the $7.1 trillion spent by the U.S. government over the past year. And with the acceleration of the passage of the “Big Beauty Act” (destined to “break down the budget”), Hartnett still tactically believes that “rising US Treasury yields and falling US dollars” (i.e., 30-year US Treasury >5% + US dollar index <100) will be bearish for risk assets. Last week, the cryptocurrency market saw inflows of $2.3 billion, a record cumulative size; U.S. tech stocks saw epic outflows of $6.8 billion; High-yield inflows of $9.8 billion over the past 4 weeks (peak since November 2023). Hartnett pointedly pointed out that “if long-term Treasuries (and the dollar) crash, US stocks will be devastated”, and Treasury yields above 5% are extremely damaging to the highly financialized US economy. When the 5-year Treasury yield is greater than 3.25%, the deterioration of $1.2 trillion in interest payments in the United States will accelerate; If it remains below 3.25%, the cost of US debt is expected to stabilize.

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