The $7 Trillion Cash Tsunami That Could Send Bitcoin To The Moon

I've been watching the markets like a hawk lately, and let me tell you - something massive is brewing. There's a whopping $7.26 trillion just sitting in US money market funds, and I'm betting a good chunk of it is about to flood into crypto before year's end.

Just last week, these funds added another $52.37 billion according to the Investment Company Institute. Retail investors pumped in $18.9 billion while institutional players poured in $33.47 billion. This isn't just normal market movement - it's dry powder waiting for the right moment.

Why am I so bullish? Because these money market funds were safety nets during COVID, but with the Fed about to cut rates, that cash is getting itchy. When your 4.5% yield gets slashed to 4% or lower, suddenly Bitcoin's potential upside looks a lot more appealing.

David Duong from a major crypto research desk nailed it when he said, "There is over $7 trillion inside money market funds, and all of that is retail money." As rates drop, that money's going to find new homes - and crypto's front door is wide open.

The Fed meeting on September 16 will be crucial. Markets are already pricing in at least a 25-basis-point cut, with some brave souls betting on 50. Either way, the cash dam is cracking.

Despite this potential tsunami, crypto markets have been surprisingly chill. Bitcoin's hovering above $112K while Ethereum sits around $4,350. The CD20 index is barely up 1.6%. It's almost too quiet.

Last month's pathetic jobs report (just 22,000 jobs added versus the expected 75,000) has already pushed Treasury yields to yearly lows. Investors are pricing in 72 basis points of cuts this year alone.

Not everyone sees this as bullish though. The pseudonymous EndGame Macro pointed out we only see money market buildups like this "when investors want yield but don't want to take on duration or equity risk." That happened after the dot-com crash and the 2008 financial crisis.

But here's my take - this time it's different. With inflation cooling and rate cuts coming, a substantial portion of that $7 trillion mountain of cash will be looking for bigger returns. And for many investors, Bitcoin and Ethereum will be first in line when the flood gates open.