Why Cash is the Only Winner in the 2025 Market Crash

In a year where every major asset class has faltered, the most boring asset of all has emerged victorious: Cash. With the crypto market losing $1 trillion, stocks sliding globally, and gold dipping to $4,033, holding US Dollars in a high-interest savings account has outperformed almost every hedge fund strategy.
This “Cash is King” dynamic is driven by the Federal Reserve. By keeping interest rates high and delaying cuts, the Fed has made cash valuable again. Why risk your money in a “nervous” stock market or an “irrational” AI sector when you can get a risk-free return?
This capital flight to cash is draining liquidity from the system, causing the crashes we see in Bitcoin and the FTSE 100. It is a vicious cycle: as assets fall, investors sell to raise cash, which causes assets to fall further.
However, holding cash is not a permanent strategy. As UBS analysts point out, eventually rates will fall and assets will bottom out. The holder of cash will then be in the prime position to buy distressed assets—like Bitcoin at April lows or gold on the dip—at bargain prices.
For now, the market message is clear: return of capital is more important than return on capital. Until the “correction” predicted by JP Morgan is complete, the sidelines are the safest place to be.