Barchart, the total assets held in money market funds (MMFs) have risen to a record $7.24 trillion. This raises speculation that Bitcoin may soon benefit from sidelined liquidity.
At the same time, data also shows a rise in global liquidity to COVID-19 pandemic levels, adding credibility to optimistic analysts' assumptions about Bitcoin and cryptocurrencies.
$7.24 trillion of sidelined cash raises speculation about Bitcoin
Barchart indicates that liquidity held in money market funds has risen to a record level as investors seek safety amid economic uncertainty. Money market funds are low-risk investments that provide liquidity and returns.
$7.24 trillion in money market funds. Source: Barchart on X
Some analysts see this cash accumulation as a sign of market hesitation that may turn into an upward trend. At the same time, others warn that this narrative overestimates investors' readiness.
Crypto strategist Sight_Bringer described the chart as a "compression file," labeling current money market fund levels as a "disbelief reservoir" rather than security. The analyst argues that even a modest 5% rotation of money market funds into Bitcoin could ignite a new monetary system.
"This is not just money on the sidelines. It’s a vessel of disbelief and once faith ignites, the dam breaks," it was published.
According to Sight_Bringer, traders are looking for a signal that could be a crucial confirmation that Bitcoin is an asset of reserve quality in a world losing faith in traditional finance (TradFi).
"Liquidity does not disappear. It waits. It watches. Then it flows violently reflexively," added SightBringer.
However, not all analysts share this view. Macro analyst Octavio "Tavi" Costa argued that money market funds should be viewed in proportion to total market capitalization.
"At the bottom of the global financial crisis, money market funds represented 56% of the US stock market. Today, we are nowhere near that at all," he stated.
Money market funds to total market size. Source: Analyst Octavio on X
A macroeconomic analyst argues that investors may have less purchasing power than many believe regarding the stock market size.
Despite the debate around the money market fund narrative, data suggests that global liquidity has returned and is nearing levels not seen since the COVID-19 era.
Rising global liquidity: Echoes of 2020 and Bitcoin's historic rise
Elsewhere, recent data shows that the US money supply reached a new record in April 2025 for the first time in three years. Investor Charlie Bilello noted that "after a brief pause, money printing has returned," with liquidity increasing beyond the United States.
Global liquidity rises to a 3-year high. Source: Charlie Bilello on X
This indicates a resumption of monetary expansion, with the increase aligning with historical trends where M2 growth correlates with rising asset prices.
Meanwhile, analyst Crypto Dan noted that global liquidity is now approaching $140 trillion. Notably, this threshold is comparable to the era of unlimited quantitative easing in 2020-2021.
"It is also tied to the overall rise in the cryptocurrency market," it noted.
Global liquidity. Source: Crypto Dan on X
With inflation receding but recession risks continuing, central banks in the US, China, and Europe have resumed stimulus efforts, quietly fueling asset prices. This bodes well for Bitcoin, which has historically risen alongside liquidity pumping.
Research firm Cross_Border Capital confirmed that Bitcoin is a "true global asset that primarily responds to global liquidity," with China continuing to play a pivotal role in these flows.
Julian Bitel, Head of Macro Research at Global Macro Investor (GMI), suggested that Bitcoin may enter a banana zone. This means a phase of explosive upward price movement driven by aggregate liquidity and market reflexivity.
Whether the $7.24 trillion in money market funds is a fuse or a false signal, the components driving the major move in cryptocurrencies align. These include increased liquidity, hesitant institutions, and a mature Bitcoin narrative amid geopolitical and monetary uncertainty.
However, the question is not whether it is flowing. Rather, what are the signals that evoke fear, encouraging traders and investors to conduct their own research.
Performance of Bitcoin (BTC) price. Source: BeIn_Crypto
As of this report, Bitcoin is trading at $108,875, down 0.7% in the past 24 hours.