Investor Cash Levels Hit Record Low as Bullish Sentiment Soars to Highest Since 2021
Investor cash allocations dropped to a record-low 3.3% according to Bank of America’s Fund Manager Survey, reflecting a strong bullish sentiment among fund managers. The survey, which tracks around 200 fund managers managing more than $500 billion in assets, revealed a net overweight exposure to equities at 42%, the highest since December 2024. Exposure to commodities also rose to 18%, the strongest level since September 2022, with gold, silver, and copper nearing record highs.
Overall sentiment is the strongest since July 2021, with 57% of respondents forecasting a soft landing by 2026 and only 3% expecting a hard landing, the lowest pessimism observed since mid-2021. Liquidity conditions were rated the third-best in 17 years, contributing to the optimistic outlook.
However, analysts noted that a traditional market pullback could deepen Bitcoin losses if it correlates with Nasdaq trends. Conversely, a broad stock decline might prompt Federal Reserve rate cuts in 2026, potentially reigniting a crypto bull market. The Fed is projected to implement just one rate cut during that year.
