According to The Kobeissi Letter, the US 2-Year Treasury Note yield has climbed above 4.00% after market close, signaling a significant shift in risk-free interest rates (source: The Kobeissi Letter, Twitter, May 21, 2025). This development elevates the risk-free rate, which directly impacts investor appetite for both equities and cryptocurrencies. Historically, higher Treasury yields attract capital away from risk assets like Bitcoin and altcoins, as investors seek safe, stable returns. Traders should closely monitor bond yields, as sustained rates above 4% may trigger increased volatility and downward pressure in crypto prices due to tightening liquidity conditions and more attractive fixed-income alternatives.

According to The Kobeissi Letter, US consumer stock market sentiment has reached a 14-year low, with 49% of consumers expecting lower stock prices over the next 12 months as of April 2025. This sharp increase in bearish sentiment, alongside a drop to 36% in consumers expecting higher prices (the lowest since Q4 2023), signals heightened risk aversion in traditional markets (source: The Kobeissi Letter, Twitter, May 7, 2025). For crypto traders, this historic pessimism in equities may lead to increased capital flows into digital assets as alternative investments, impacting Bitcoin and Ethereum trading volumes and volatility. Monitoring sentiment shifts is crucial for adjusting crypto trading strategies to capture potential inflows from risk-averse equity investors.