Overview
- Bitcoin has fallen below its 55-day moving average, a level Citi links to weaker risk-adjusted returns for the Nasdaq 100.
- Analysts led by Dirk Willer attribute recent crypto weakness to U.S. liquidity withdrawal from Treasury cash rebuilding and an estimated $500 billion drop in bank reserves since mid-July.
- Citi characterizes bitcoin as a faster responder to liquidity shifts than equities, casting its decline as an early signal for stock performance.
- The report notes Treasury balances are approaching levels where rebuilding has typically stopped, suggesting liquidity could soon improve for both bitcoin and stocks.
- Citi also flags heavy AI-driven bond issuance by hyperscalers such as Meta and Alphabet as a rising leverage risk, warning the shift from cash to credit is rarely favorable for bondholders.