Bitcoin has reached a new all-time high, climbing to as much as $125,689 on Sunday in Asia. This surge is part of a wider risk rally sparked by concerns over the US government shutdown, which began on Wednesday.
The rise was supported by gains in US equities and renewed inflows into Bitcoin-linked exchange-traded funds (ETFs). Investors are viewing the shutdown as a factor driving demand for safe-haven assets, a trend some market participants refer to as the “debasement trade.”
Bitcoin’s performance this year has been strong, gaining more than 30% and exceeding its previous high of $124,514 set on August 14. The largest digital asset by market value has steadily appreciated over the past year, helped by the supportive legislative environment in Washington under President Donald Trump.
Public companies, notably Michael Saylor’s Strategy, have boosted demand by stockpiling Bitcoin as a corporate asset, a strategy that has spread to other cryptocurrencies like Ether, lifting digital assets broadly.
Joshua Lim, co-head of markets at crypto prime brokerage FalconX, noted that Bitcoin’s rise fits within a broader trend where various assets including equities, gold, and even collectibles like Pokémon cards are hitting record levels, driven by concerns over the weakening value of the US dollar.
October is also historically a strong month for Bitcoin, nicknamed “Uptober,” with the token having posted gains in nine of the last ten Octobers. This seasonal pattern adds to the bullish sentiment surrounding the cryptocurrency.
US stocks also touched record highs on Friday, driven by major artificial intelligence deals and partnerships, offsetting concerns over a prolonged government shutdown and weak business activity.
Treasuries and the dollar fell, while gold was on track for a seventh consecutive weekly gain, bolstered by central bank purchases amid declining US interest rates and ongoing inflation concerns.
Geoff Kendrick, global head of digital assets research at Standard Chartered Plc, said the current shutdown could have a greater impact on Bitcoin than previous ones. He noted that during the 2018–2019 shutdown, Bitcoin traded less in line with traditional risk assets, but now it appears to respond more closely to broader market trends.
Bloomberg
