"$7.24 trillion in money market funds signals massive sidelined liquidity, potentially driving a Bitcoin breakout amid rising global liquidity."
Analysts debate whether the MMF levels reflect stored disbelief or a real preparation to rotate funds into Bitcoin and the crypto markets.
Global liquidity is rising to levels close to the COVID era highs, with renewed monetary stimulus supporting a bullish outlook for Bitcoin's price momentum.
According to Barchart data, total assets in money market funds (MMF) have reached a historic high of $7.24 trillion. This raises speculation that Bitcoin could soon benefit from sidelined liquidity.
Meanwhile, data also shows that global liquidity is increasing to COVID-19 levels, adding credibility to analysts' bullish assumptions about Bitcoin and crypto.
Barchart indicates that liquidity in MMFs has reached a historic high as investors seek safety amid economic uncertainty. MMFs are low-risk investments that offer liquidity and returns.
Some analysts see this cash increase as a sign of doubt in the market that could shift towards a bullish stance. Meanwhile, others warn that the narrative exaggerates investors' willingness.
Crypto strategist SightBringer referred to the chart as a “tension coil,” describing the current MMF levels as “stored disbelief” rather than safety. The analyst argues that even a modest 5% rotation of MMFs into Bitcoin could ignite a new monetary regime.
“Liquidity does not disappear. Wait. Watch. And then flood with reflective violence,” added SightBringer.
The macro analyst argues that investors may have less dry powder than many believe regarding the size of the stock market.
Despite the debate around the MMF narrative, data suggests that global liquidity has returned and is approaching levels not seen since the COVID-19 era.
