$7 Trillion in Money Market Funds Could Fuel Bitcoin and Altcoins
September 9, 2025
U.S. money market fund assets climbed $52.37 billion last week, reaching $7.26 trillion, according to the Investment Company Institute (ICI). Analysts say this massive cash reserve could soon rotate into riskier assets, including cryptocurrencies, potentially powering the next rally in Bitcoin (BTC) and altcoins.
Retail funds grew $18.9 billion to $2.96 trillion, while institutional holdings rose $33.47 billion to $4.29 trillion. Money market funds invest in short-term, high-quality debt instruments like Treasury bills, certificates of deposit, and commercial paper, offering liquidity and safety.
David Duong, Coinbase’s Institutional Head of Research, told CoinDesk, “With over $7 trillion sitting in money market funds, incoming rate cuts could shift significant cash into equities, crypto, and other assets.”
Markets are pricing in at least a 25-basis-point Fed rate cut next week, with some expecting 50 bps. Jack Ablin, Chief Investment Strategist at Cresset, noted, “Lower yields could prompt investors to redeploy money into stocks and cryptocurrencies.”
However, rotation depends on broader economic conditions. Many investors may prefer holding cash in money market funds for stability, while pseudonymous analyst EndGame Macro notes that large balances historically flow first into Treasuries, then risk assets, depending on the size of the rate cut.
