Summary
- The size of U.S. money market funds (MMFs) reached an all-time high of $7.2699 trillion.
- The head of institutional research at Coinbase predicted that interest rate cuts could lower MMF yields and move funds to the virtual asset market.
- Cresset's chief strategist also said that a decrease in yields could expand investor inflows into risk-asset markets.
As the size of U.S. money market funds (MMFs) surpassed $7 trillion, an analysis suggested that funds could flow into the virtual asset (cryptocurrency) market.
On the 9th (local time), David Duong, head of institutional research at Coinbase, told CoinDesk in an interview, "The size of U.S. money market funds reached $7.2699 trillion," and "If interest rate cuts begin in the future, MMF yields would fall, making it likely that investors will move funds into stocks and virtual assets, among others," he predicted.
Jack Ablin, chief strategist at Cresset, also said, "The current yield of money market funds is around 4.5%," and "If yields decrease (due to rate cuts), more investors could flow into risk-asset markets."
Meanwhile, money market funds are a type of mutual fund that invests in government bonds, certificates of deposit (CDs), and commercial paper.
Son Min
sonmin@bloomingbit.ioHello I’m Son Min, a journalist at BloomingBit
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