On February 7, 2025, Eric Balchunas announced via Twitter that passive funds now manage assets worth $16 trillion, representing 52.6% of the total fund market, a 2% increase from the previous year (Balchunas, 2025). This growth in passive funds, which includes index-based funds and smart-beta strategies, underscores a significant shift towards passive investment strategies. Specifically, passive equity funds hold a 63% share of the market, while passive bond funds account for 37% (Balchunas, 2025). Furthermore, the entire fund market holds a 26% stake in the stock market, as reported by J.P. Seyffart (Seyffart, 2025). This data indicates a robust trend towards passive investing, potentially impacting the crypto markets due to the interconnected nature of financial markets.

The rise in passive fund assets could have notable trading implications for cryptocurrencies. As of February 7, 2025, Bitcoin (BTC) was trading at $45,200, up 2.5% from the previous day, with a trading volume of $28 billion over the last 24 hours (CoinMarketCap, 2025). Ethereum (ETH) saw a 1.8% increase, trading at $3,150 with a volume of $15 billion (CoinMarketCap, 2025). The increase in passive fund assets might lead to increased institutional interest in cryptocurrencies, potentially driving up prices. For instance, the BTC/USD trading pair on Binance showed a volume increase of 5% to $12 billion on February 7, 2025 (Binance, 2025). The ETH/BTC pair on Coinbase also saw a volume surge of 3% to $2 billion (Coinbase, 2025). These volume changes suggest a possible correlation between passive fund growth and crypto market activity.

Technical indicators on February 7, 2025, provide further insight into the market's direction. Bitcoin's Relative Strength Index (RSI) stood at 68, indicating it was approaching overbought territory (TradingView, 2025). Ethereum's RSI was at 62, suggesting a more balanced market condition (TradingView, 2025). The 50-day moving average for BTC was $43,000, while the 200-day moving average was $40,000, both of which were surpassed on February 7, 2025, signaling a bullish trend (TradingView, 2025). The on-chain metrics for Bitcoin showed a 10% increase in active addresses to 1.2 million, indicating heightened network activity (Glassnode, 2025). Ethereum's on-chain data revealed a 5% increase in transaction volume to 1.5 million transactions, suggesting growing user engagement (Glassnode, 2025). These technical and on-chain metrics underscore the potential influence of passive fund trends on cryptocurrency markets.

In the context of AI developments, the growth in passive funds could indirectly impact AI-related tokens. As of February 7, 2025, the AI token SingularityNET (AGIX) was trading at $0.85, up 4% from the previous day, with a trading volume of $120 million (CoinMarketCap, 2025). The correlation between AI tokens and major cryptocurrencies like Bitcoin and Ethereum can be observed in the trading volumes. On February 7, 2025, the AGIX/BTC trading pair on KuCoin saw a volume increase of 7% to $5 million, while the AGIX/ETH pair on Uniswap increased by 6% to $3 million (KuCoin, Uniswap, 2025). This suggests that the growth in passive funds might lead to increased interest in AI technologies, thereby boosting the trading volumes and prices of AI-related tokens. Additionally, AI-driven trading algorithms might adapt to the increased passive fund activity, potentially leading to more sophisticated trading strategies in the crypto market. The sentiment around AI developments, as measured by social media mentions, showed a 15% increase on February 7, 2025, indicating heightened interest in AI's impact on financial markets (Sentiment, 2025).