$7T in Liquidity Could Be the Spark Behind the Next Crypto Surge

$7 Trillion Cash Pile Could Propel Bitcoin and Altcoins Higher

September 9, 2025

U.S. money market fund assets surged by $52.37 billion last week, reaching $7.26 trillion for the week ended September 3, according to the Investment Company Institute (ICI). Analysts suggest this vast pool of cash could soon rotate into riskier assets—including cryptocurrencies—potentially fueling the next rally in Bitcoin (BTC) and other altcoins.

Money market funds invest in short-term, high-quality debt like Treasury bills, certificates of deposit, and commercial paper. Retail fund assets rose $18.9 billion to $2.96 trillion, while institutional holdings increased $33.47 billion to $4.29 trillion. These figures are reported weekly to the Federal Reserve.

The funds’ growth reflects their safe-haven appeal during crises such as the COVID-19 pandemic and the Fed’s rate-hike cycle. Even after last year’s rate cuts, inflows remained robust.

David Duong, Institutional Head of Research at Coinbase, told CoinDesk, “There is over $7 trillion inside money market funds. As rate cuts come, much of that retail cash could flow into equities, crypto, and other assets.”

The market anticipates at least a 25-basis-point cut at the Fed’s next meeting, with some expecting 50 bps. Lower yields could incentivize investors to redeploy funds into higher-return assets. Jack Ablin, Chief Investment Strategist at Cresset, explained, “If money market yields drop, investors may shift cash into stocks and cryptocurrencies.”

However, rotation depends on broader economic conditions. Many investors may retain money market balances for stability and liquidity amid uncertainty. Pseudonymous analyst EndGame Macro noted, “Large money market build-ups occur when investors seek yield without taking equity or duration risk. As rates fall, cash first flows to Treasuries, then risk assets.”

The magnitude of the rotation hinges on the size of the Fed’s move. A modest 25-bps cut could lead to gradual shifts, while a 50-bps reduction may accelerate capital movement toward Treasuries and eventually into riskier markets.