Will Fed Rate Cuts Push $7 Trillion Cash Into Crypto Assets?
The post Will Fed Rate Cuts Push $7 Trillion Cash Into Crypto Assets? appeared on BitcoinEthereumNews.com. Global investors have parked a record $7.4 trillion in money market funds, marking an all-time high. While this defensive positioning highlights caution across risk assets, such cash piles rarely stay idle for long. With the Federal Reserve poised to decide on rate cuts next week, even a modest shift of this capital could have a huge impact on markets. Some analysts believe crypto could be a surprising beneficiary once cash begins rotating out of ‘safe’ instruments. Why Money Market Funds Matter for Risk Assets Sponsored Money market funds are low-risk investment vehicles that pool investors’ money into short-term, high-quality debt instruments like Treasury bills, certificates of deposit, and commercial paper. They aim to provide stability, liquidity, and modest returns. This makes them a popular option for preserving capital while offering better yields than regular savings accounts. Often used as a parking spot during uncertainty, these funds swell when investors prefer security over riskier assets. According to Barchart data, a record $7.4 trillion now sits in money market funds. Money Market Funds Record High. Source: X/Barchart In a post on X (formerly Twitter), a macro analyst highlighted that with yields holding above 5%, holding cash has become an appealing option for investors. “We only see buildups like this when investors want yield but don’t want to take on duration or equity risk. It happened after the dot com bust, again after the GFC, and in 2020–21 when rates were floored and money waited on the sidelines,” the post read. Sponsored What Happens If The Fed Cuts Interest Rates However, the analyst cautioned that this trend will unlikely persist if the Federal Reserve moves to cut rates. A reduction of 25 or 50 basis points on September 17 would lower yields on money funds, savings accounts, and short-term Treasuries. While not sparking…
The post Will Fed Rate Cuts Push $7 Trillion Cash Into Crypto Assets? appeared on BitcoinEthereumNews.com.
Global investors have parked a record $7.4 trillion in money market funds, marking an all-time high. While this defensive positioning highlights caution across risk assets, such cash piles rarely stay idle for long. With the Federal Reserve poised to decide on rate cuts next week, even a modest shift of this capital could have a huge impact on markets. Some analysts believe crypto could be a surprising beneficiary once cash begins rotating out of ‘safe’ instruments. Why Money Market Funds Matter for Risk Assets Sponsored Money market funds are low-risk investment vehicles that pool investors’ money into short-term, high-quality debt instruments like Treasury bills, certificates of deposit, and commercial paper. They aim to provide stability, liquidity, and modest returns. This makes them a popular option for preserving capital while offering better yields than regular savings accounts. Often used as a parking spot during uncertainty, these funds swell when investors prefer security over riskier assets. According to Barchart data, a record $7.4 trillion now sits in money market funds. Money Market Funds Record High. Source: X/Barchart In a post on X (formerly Twitter), a macro analyst highlighted that with yields holding above 5%, holding cash has become an appealing option for investors. “We only see buildups like this when investors want yield but don’t want to take on duration or equity risk. It happened after the dot com bust, again after the GFC, and in 2020–21 when rates were floored and money waited on the sidelines,” the post read. Sponsored What Happens If The Fed Cuts Interest Rates However, the analyst cautioned that this trend will unlikely persist if the Federal Reserve moves to cut rates. A reduction of 25 or 50 basis points on September 17 would lower yields on money funds, savings accounts, and short-term Treasuries. While not sparking…
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