BofA: Treasuries Could Hedge an AI Selloff
Bank of America says US Treasuries could once again hedge an AI selloff if weakening AI demand pushes both equities and bond yields lower. The shift followed an October revenue shortfall at OpenAI: annualised net revenue was estimated at $50 billion, below earlier projections of $70 billion. The Nasdaq fell more than 1%, while Nvidia lost 2.9%, AMD fell 3.9% and Oracle dropped 5.5%; Treasury yields also declined.
BofA describes the market reaction as a potential demand shock, in which weaker growth weighs on both stocks and yields. That contrasts with much of 2026, when AI concerns had often coincided with rising yields. In September, 33% of fund managers surveyed by BofA cited rising yields as their biggest tail risk, while 28% named an AI bubble.
The AI buildout also has growing credit-market exposure. Hyperscalers issued $121 billion in corporate bonds in the year to October 2026. BofA forecasts annual AI infrastructure bond issuance of $140 billion to $300 billion over the next three years. If the bank’s thesis holds, Treasuries may cushion an AI selloff, although the large volume of new corporate debt could affect credit markets.
Neutral
The article has no direct cryptocurrency catalyst: it discusses US equities, Treasury yields and corporate borrowing rather than crypto assets, regulation or blockchain activity. The likely crypto effect is indirect and mixed. If an AI-driven growth scare prompts broad risk reduction, traders may sell cryptocurrencies alongside technology shares, as digital assets have often behaved like high-volatility risk assets during equity selloffs. At the same time, falling Treasury yields can ease financial conditions and support demand for risk assets, potentially limiting that pressure.
In the short term, crypto traders may watch the Nasdaq, Treasury yields, the US dollar and volatility for signs of whether the market is treating AI weakness as a broader growth shock. A sharp deterioration in risk appetite would be bearish for crypto prices; a decline in yields without a wider flight from risk could be more supportive. The report itself does not establish a clear directional signal for crypto, so a neutral assessment is appropriate.
Over the longer term, the projected $140 billion to $300 billion in annual AI infrastructure bond issuance could add to corporate credit supply and influence financing conditions. Any resulting stress in credit markets could spill over into crypto through reduced liquidity and risk-taking. Conversely, if Treasuries reliably hedge AI-related equity declines, that may help stabilise broader portfolios. These are macro channels, not evidence of a direct change in crypto fundamentals.