Professional investors have cut their bond allocations to the deepest underweight since June 2022 and boosted equity exposure to a net 50% overweight, Bank of America's May Global Fund Manager Survey showed. The rotation comes as the US 10-year yield hit its highest level since January 2025, keeping Bitcoin near the $75,000-$78,000 support zone amid $1.6 billion in ETF outflows over the past 10 days.
Bonds at Their Least Popular Since 2022
The survey, conducted through May 14, found managers slashed bond exposure to a net 44% underweight, down from 33% in April — the deepest underweight since June 2022. Global equity exposure surged to a net 50% overweight from just 13% a month earlier. Cash holdings dropped to 3.9% from 4.3%.
Forty percent of respondents flagged second-wave inflation as the biggest tail risk. Another 18% pointed to a disorderly rise in bond yields — a fear that materialized this week. The 10-year yield hit 4.6653% on May 19, levels not seen since January 2025. The 30-year bond touched 5.14%, and the 10-year real yield climbed to 2.13%.
Bitcoin ETF Outflows Top $1.6 Billion
The macro backdrop is showing up in crypto markets. US spot Bitcoin ETFs recorded net outflows of $648.6 million on May 18 and another $290.4 million on May 15, pushing the 10-day total to negative $1.6 billion. Bitcoin traded near $77,000 on Monday, holding the $75,000–$78,000 support area that has been closely watched.
The Chicago Fed's National Financial Conditions Index stood at -0.524 for the week ending May 8, indicating conditions are still looser than historical averages — but that could tighten if yields keep climbing. The IMF and OECD have both flagged bond market risks, with the OECD noting that hedge funds have become more important marginal buyers in some core government bond markets.
Citi's $112,000 Base Case Still Stands
Despite the near-term pressure, Citi's base-case 12-month Bitcoin forecast remains $112,000, with a bull case of $165,000 anchored to stronger end-investor demand. The bank sees a recovery in ETF inflows as key to breaking through resistance.
From the institutional side, the Bank of Canada recently framed the elevated long-term yields as a term-premium problem — investors demanding more compensation to absorb heavy sovereign issuance. That dynamic is also behind the IMF's warning that rollover risk in core sovereign markets is a threat to global financial stability.
The Trigger for a Rebound
The data suggests that if the 10-year yield falls back toward 4.20%–4.40% and the 30-year drops below 5%, ETF inflows would likely resume and Bitcoin could break above the $80,000–$82,000 resistance zone. Until then, the $75,000–$78,000 band is the line in the sand.
Next up: weekly ETF flow data due Friday will show whether the selling is slowing — or accelerating.
