$7 Trillion in Money Market Funds Could Boost Bitcoin and Altcoins

September 9, 2025

U.S. money market funds now hold over $7 trillion, with total assets rising $52.37 billion to $7.26 trillion for the week ended September 3, according to the Investment Company Institute (ICI). Analysts say this massive cash reserve could soon rotate into riskier assets, including cryptocurrencies, potentially fueling the next leg higher in Bitcoin (BTC) and altcoins.

Money market funds invest in short-term, high-quality debt like Treasury bills, certificates of deposit, and commercial paper. Retail funds grew $18.9 billion to $2.96 trillion, while institutional assets rose $33.47 billion to $4.29 trillion.

David Duong, Institutional Head of Research at Coinbase, told CoinDesk, “There is over $7 trillion in money market funds. As rate cuts arrive, much of this cash could flow into equities, crypto, and other asset classes.”

Markets are pricing in a 25-basis-point Fed rate cut next week, with some expecting 50 bps. Lower yields could incentivize investors to redeploy funds toward higher-return assets. Jack Ablin, Chief Investment Strategist at Cresset, noted, “A drop in yields may push investors into stocks and cryptocurrencies.”

However, rotation depends on economic conditions. Many investors may prefer to stay in money market funds for liquidity and stability amid uncertainty. Pseudonymous analyst EndGame Macro highlighted that large money market balances historically appear during periods of caution, with cash flowing first into Treasuries, then into risk assets as yields fall.

The scale of the rotation will hinge on the size of the Fed’s cut: modest moves may lead to gradual shifts, while larger cuts could accelerate flows into Treasuries and eventually riskier markets.