Bitcoin Faces Risk from Equity Market Compression, Bank of America Warns

Bank of America has identified a potential risk of multiple compression in equity markets that may negatively affect Bitcoin. According to NS3.AI, Bitcoin is increasingly behaving like a high-volatility equity beta rather than serving as a diversification asset. The analysis from Bank of America highlights structural pressures such as earnings downgrades, increased IPO supply, rising leverage, and software sector weakness related to AI concerns. These factors could lead to amplified outflows and liquidations due to Bitcoin's liquidity and ETF-linked mechanics, especially as institutional risk-off sentiment accelerates market sell-offs.