NEW YORK, NY – Bitcoin has surged to yet another all-time high, buoyed by a broad rally in risk assets and investor speculation surrounding the U.S. government shutdown. The world's largest cryptocurrency is extending a year-long ascent, hitting new milestones as market dynamics shift.
The token climbed to an impressive $125,689 on Sunday in Asia, surpassing its previous record set on August 14. This rise was underpinned by an uptick in U.S. equities and renewed inflows into Bitcoin ETFs inflows. Investors are increasingly speculating that the government shutdown, which began last Wednesday, is driving capital towards perceived safe-haven assets, a trend some market participants are now calling the "debasement trade Bitcoin."
"With many assets including equities, gold, and even collectibles like Pokemon cards hitting all-time highs, it’s no surprise Bitcoin is benefiting from the dollar debasement narrative," noted Joshua Lim, co-head of markets at crypto prime brokerage firm FalconX. This sentiment is further amplified by Bitcoin's historical performance in October, a month affectionately nicknamed "Uptober Bitcoin" due to its consistent gains, having risen in nine of the past ten Octobers.
The largest digital asset by market capitalization reached its prior peak of $124,514 on August 14. Its recent performance means the token is now up more than 30% this year, illustrating a robust Bitcoin price surge despite broader economic uncertainties.
Bitcoin has experienced a steady climb throughout most of the past year. This sustained growth is partly attributed to what some view as a friendly legislative climate in Washington, which gained momentum under former President Donald Trump. Public companies, notably led by Michael Saylor’s Strategy, have significantly boosted demand through an increasingly popular corporate tactic of stockpiling the original cryptocurrency. This playbook has since expanded, influencing a broader digital assets rise across the market, including smaller competitors like Ether.
Meanwhile, U.S. stocks touched record highs on Friday, amidst another round of major artificial intelligence deals and partnerships. This happened even as the prospect of a prolonged shutdown loomed and business activity readings appeared gloomy. Treasuries and the dollar slid, while gold was on track for its seventh consecutive weekly gain, fueled by central bank buying amid falling U.S. interest rates and persistent inflation concerns. This divergence highlights a complex market environment.
"The shutdown matters this time around," commented Geoff Kendrick, global head of digital assets research at Standard Chartered Plc, who anticipates Bitcoin will continue its ascent during this period. He pointed out that Bitcoin was "in a different place" during the previous shutdown between 2018 and 2019, when the token exhibited less correlation with traditional risk assets. This current US government shutdown Bitcoin correlation signals a maturation of the cryptocurrency as an investment vehicle.
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