$7 Trillion in Money Market Funds Could Drive Next Bitcoin and Altcoin Rally

September 9, 2025

U.S. money market funds surged by $52.37 billion last week, pushing total assets to $7.26 trillion, according to the Investment Company Institute (ICI). Analysts say this massive cash pool could soon rotate into riskier assets, including cryptocurrencies, potentially fueling the next rally in Bitcoin (BTC) and altcoins.

Retail money market funds increased by $18.9 billion to $2.96 trillion, while institutional holdings rose $33.47 billion to $4.29 trillion. These funds invest in short-term, high-quality debt such as Treasury bills, certificates of deposit, and commercial paper.

David Duong, Coinbase’s Institutional Head of Research, told CoinDesk, “With over $7 trillion in money market funds, rate cuts could channel significant cash into equities, crypto, and other asset classes.”

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 may encourage investors to redeploy money into stocks and cryptocurrencies.”

However, rotation depends on economic conditions. Many investors may retain cash in money market funds for liquidity and stability. Pseudonymous analyst EndGame Macro highlighted that large balances typically precede shifts into Treasuries first, then risk assets, depending on the size of the rate cut.