Bank of America Spotlights Unprecedented Inflows into US Stocks and Cryptocurrencies

Bank of America has reported record-breaking inflows into both U.S. stocks and cryptocurrencies. Spearheaded by Chief Investment Strategist Michael Hartnett, the analysis reported a staggering $56.1 billion surge into U.S. stock funds. This is the largest single-week influx ever recorded.

Additionally, cryptocurrencies experienced a significant milestone with $3.4 billion in inflows.

Spot Bitcoin ETFs attract major players

The cryptocurrency landscape is witnessing renewed institutional interest, with Bank of America’s Merrill Lynch and Wells Fargo offering spot bitcoin exchange-traded funds (ETFs) to their clients. This shows the growing acceptance of digital assets among traditional financial institutions.

Since the Securities and Exchange Commission’s approval of these investment vehicles in January, there has been keen interest in how they would integrate into major U.S. brokerage platforms.

According to ETF analyst Eric Balchunas, U.S. growth stocks and Bitcoin have emerged as the predominant narratives, capturing significant investor interest and capital inflows. Corporate bonds also rank high in the mix. Both Japanese and Emerging Markets (EM) ETFs have an unusual but notable presence on the investment scene. On the flip side, despite reaching all-time highs (ATHs), gold ETFs find themselves lagging.

Nice look at 2024 YTD ETF flows by category.. US growth stocks and bitcoin are stories of year so far.. corp bonds up there as well.. Notable Japan and EM both making rare appearance. Gold ETFs in the gutter (despite seeing ATHs) is also interesting. Via @Todd_Sohn pic.twitter.com/VfFYvnWRKk

— Eric Balchunas (@EricBalchunas) March 15, 2024

Bubble concerns

The inflow of investments into tech stocks and cryptocurrencies signals robust market enthusiasm, but Bank of America’s Hartnett has voiced concerns over potential bubble characteristics in these sectors.

The rapid ascent of the tech industry’s leading companies, alongside record highs in cryptocurrency values, suggests a market environment ripe with “tremendous euphoria.”

This sentiment is compounded by the reacceleration of inflation and softening growth figures, which, according to Hartnett, indicate a bubble mentality among investors.

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