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$7 Trillion in Money Market Funds Could Spark the Next Bitcoin and Altcoin Rally
September 9, 2025
U.S. money market funds now hold over $7 trillion, with total assets rising by $52.37 billion to $7.26 trillion for the week ended September 3, according to the Investment Company Institute (ICI). Analysts suggest this massive cash pile could soon rotate into riskier assets, including cryptocurrencies, potentially fueling the next leg higher for Bitcoin (BTC) and other altcoins.
Money market funds invest in short-term, high-quality debt instruments, such as Treasury bills, certificates of deposit, and commercial paper. Retail funds grew by $18.9 billion to $2.96 trillion, while institutional assets rose $33.47 billion to $4.29 trillion. These weekly reports are submitted to the Federal Reserve.
The inflows reflect the funds’ haven appeal during crises, including the COVID-19 pandemic and the Federal Reserve’s rate-hike cycle, which boosted yields. Even after rate cuts last year, inflows remained strong.
According to David Duong, Coinbase’s Institutional Head of Research, “There is over $7 trillion inside money market funds. As rate cuts come in, a large portion of that cash could flow into equities, crypto, and other asset classes.”
Market expectations are high ahead of next week’s Fed meeting, with a 25-basis-point cut widely anticipated and some traders predicting a 50-basis-point reduction. Rate cuts could reduce money market yields from 4.5% to 4–4.25%, prompting investors to redeploy funds. Jack Ablin, Chief Investment Strategist at Cresset, noted, “A lower yield could push investors toward stocks and cryptocurrencies.”
However, the rotation is not guaranteed. The broader economic environment will play a critical role—investors may prefer the safety and liquidity of money market funds during periods of uncertainty, despite lower yields.
Pseudonymous analyst EndGame Macro pointed out that large money market balances often signal caution: “We see buildups like this when investors want yield without taking duration or equity risk—after the dot-com bust, the GFC, and in 2020–21. As rates decline, money typically flows first into Treasuries and then into riskier assets.”
EndGame Macro emphasized the scale of the rotation will depend on the size of the Fed’s rate cut: “A cautious 25-bps move allows money to bleed down gradually, while a 50-bps cut could accelerate the shift, moving cash into Treasuries and then into risk assets. With over $7 trillion waiting, the magnitude matters as much as the direction.”
