THE CAPITALS OF MONEY MARKET FUNDS READY TO TURN IN THE CRYPTO... 🔥🔥
There is a new narrative among the big players on Wall Street: according to Hunter Horsley of Bitwise US, there are currently $7.300 trillion "parked" in money market funds.
These funds primarily invest in sovereign debt, repos, and instruments linked to central bank interest rates. Their appeal arises from the high yields offered by government bonds, but the scenario will change radically if the Fed lowers rates: the return of investors to these products would drop drastically, leading to a reallocation of liquidity.
Market enthusiasm is igniting around this possibility.
Could it be these capitals that trigger a super bull run for Bitcoin and crypto?
The reality is more complex. When rates fall, part of these funds will migrate to riskier assets, but the destinations can vary: bonds with longer maturities, insured deposits, stocks (even via ETFs), corporate bonds, commodities, infrastructure, and alternative investments such as hedge funds and private equity.
Bitcoin and crypto are positioned at the bottom of this "risk ladder," alongside more speculative investments. Therefore, only a smaller fraction of the $7.300 trillion will actually flow into crypto, but even just 2-3% could revolutionize the market.
In the last major rotation, nearly 20% of funds changed assets, a sign that the future remains open to new accelerations.
#crypto #CutRatesNow