Is a Massive Inflow of Capital into Bitcoin Expected?

A large flow of money from some of the biggest institutional investors in the United States is expected to be directed toward Bitcoin in 2026, provided that the Federal Reserve continues cutting interest rates.

This is the forecast of the crypto exchange Coinbase, which believes that the trillions of dollars currently parked in U.S. money market funds will need to be reallocated once the Fed’s rate cuts begin to reduce yields.

The year 2025 was difficult for crypto investors, who had expected major gains following the arrival of a pro-crypto administration under President Donald Trump. However, the sharp sell-off triggered by the “Liberation Day” tariffs in April pushed Bitcoin down to $74,400.

Those who survived the sell-off then participated in a volatile rally, during which the largest cryptocurrency reached a record high of $126,000 in early October, only to fall a few days later after threats of new tariff measures against China.

Investor sentiment has still not recovered—Bitcoin fell below $86,000 on Tuesday, with the decline from the all-time high now reaching 30%.

The turbulence has driven investors toward safer assets such as money market funds, which typically hold short-term government debt and are easy to trade. These funds currently manage around $7.5 trillion, and when idle cash on the sidelines is included, the total rises to nearly $10 trillion.

“There is a huge amount of capital that investors have not deployed because they were content earning around 4–5% yields from money market funds,” says David Duong, Head of Institutional Research at Coinbase.

“Now, however, the Fed is cutting rates further, yields are falling and will continue to decline. In such an environment, a lot of capital cannot remain idle because people won’t be earning enough.”

Bond markets are already pricing in at least two additional rate cuts over the coming year. Duong, whose clients include BlackRock, expects that part of this money will be directed toward cryptocurrencies. Many investors are ready to allocate capital to crypto after the Federal Reserve reduced borrowing costs last week.

However, markets were shaken by signs of excessive optimism in the technology sector following Oracle’s aggressive artificial intelligence investment plan and disappointing cloud revenue results.

“The institutional clients we speak with still have unused capital and are planning carefully how to invest it, as they remain constructive about next year,” Duong says.
“But the first half of 2026 will not be easy, and few people are comfortable that leverage has been reduced significantly.”

Meanwhile, Michael Saylor’s company, Strategy, continues to buy Bitcoin—nearly $1 billion for a second consecutive week—easing concerns that it might be forced to sell assets to pay dividends.

The crypto market is also awaiting a decision from major index provider MSCI on whether it will remove digital asset firms—where crypto holdings account for more than half of total assets—from global indices. A decision is expected by January 15, increasing investor anxiety. The Crypto Fear and Greed Index, which measures market sentiment, has once again returned to the “extreme fear” zone.

Data from crypto fund Zerocap show that several large holders recently sold more than 1,000 Bitcoin at losses of up to 16%, reflecting growing concern over further declines.

“Bitcoin’s price is currently below $86,000, and if it fails to reach $89,000, it may test the $82,500 level,” says Zerocap analyst Emir Ibrahim.

IG analyst Tony Sycamore warns that a break below the November lows of $80,537 would open the way for a retest of the Liberation Day bottom around $75,000.

Well-known analyst Jim Cramer recently shared on social media platform X that Bitcoin’s price is actually easy to support.

He suggested that its value could be artificially inflated through manipulation, large holders, or specific entities—such as Michael Saylor’s strategy.
“It’s surprising how easy it is to support Bitcoin, isn’t it?” Cramer wrote on December 15, 2025.

This comment came after Strategy invested nearly $1 billion in pure buying pressure on the market between December 8 and 14.

Despite this massive inflow of capital, the price declined. Buying at an average of $92,124, Bitcoin’s value has since fallen to around $85,000.

The market absorbed the $1 billion, yet a sell-off still followed, prompting some commentators to note that Cramer’s logic may be flawed—unless his post was sarcastic.

Reactions from the seasoned crypto community (unsurprisingly) revolve around the so-called “Inverse Cramer.”

This is a long-standing internet meme/theory suggesting that Cramer is so consistently wrong in his market predictions that investors should do the exact opposite of what he says in order to profit.

Many users welcome his pessimism, as according to the meme it signals a market bottom.

Bitcoin is currently trading around $86,411, after hitting an intraday low of $85,427 earlier in the day.

— Source: Bloomberg Terminal