Bitcoin has reached yet another all-time high, driven by a broader risk rally amid the US government shutdown, which has provided a boost to the world’s largest cryptocurrency. The token surged to a peak of $125,689 on Sunday in Asia, surpassing its prior record established on Aug. 14, buoyed by the rise in US equities and a resurgence of inflows into Bitcoin-linked exchange-traded funds. Market observers are buzzing with speculation that the shutdown, which commenced on Wednesday, will push investors toward safe-haven assets in a trend that participants are now referring to as the “debasement trade.”
“With many assets including equities, gold and even collectibles like Pokemon cards hitting all time highs, it’s no surprise Bitcoin is benefitting from the dollar debasement narrative,” stated Joshua Lim. Contributing to the optimistic outlook is Bitcoin’s historical outperformance during October, a month affectionately dubbed “Uptober.” The token has experienced gains in nine out of the last ten Octobers. The largest digital asset by market value hit a previous high of $124,514 on August 14 and has surged over 30% this year. Bitcoin has experienced a consistent upward trajectory over the past year, largely due to the favorable legislative environment in Washington, a shift attributed to President Donald Trump.
Public companies, spearheaded by Michael Saylor’s strategy, have heightened demand by adopting a growing trend of accumulating the original cryptocurrency. The playbook has made its way to smaller competitors, such as Ether, resulting in a widespread increase across digital assets. US stocks reached all-time highs on Friday, driven by a fresh wave of significant artificial intelligence deals and partnerships, defying concerns over a potential extended shutdown and a bleak outlook on business activity.
Treasuries and the dollar experienced a decline. Gold is poised for its seventh consecutive weekly gain, driven by central bank purchases in the context of declining US interest rates and persistent inflation worries. “The shutdown matters this time around,” stated Geoff Kendrick, who anticipates a rise in Bitcoin during this period. He remarked that Bitcoin was “in a different place” during the previous shutdown between 2018 and 2019, when the token traded less in line with traditional risk assets.