Bitcoin has achieved a new milestone, reaching a fresh record over the weekend for the first time since mid-August. The price climbed to $125,689, reflecting a strong surge in demand for cryptocurrencies amid the ongoing U.S. government shutdown, which began on October 1. This shutdown has led investors to gravitate toward safe-haven assets in what is being termed the “debasement trade.”
On Monday morning in London, Bitcoin was hovering around $124,000, closely approaching its all-time high. The timing of this price increase coincides with the government shutdown that disrupted the release of key economic indicators, including the nonfarm payrolls report. As a result, traditional safe-haven assets like gold have also seen substantial gains, with gold soaring above $3,900 per ounce, marking an extension of a months-long rally.
The surge in Bitcoin’s price is mirrored by a considerable influx of investment into U.S. Bitcoin exchange-traded funds (ETFs). Last week alone, investors injected $3.2 billion into a selection of 12 Bitcoin ETFs, representing the second-largest inflow since their inception in 2024. Additionally, the open interest for BlackRock’s iShares Bitcoin Trust ETF reached a record $49.8 billion on Friday, signaling a growing interest in Bitcoin investment products.
The wider cryptocurrency market is also experiencing a significant uptrend. The combined open interest on notable crypto derivatives exchanges like Deribit and IBIT is nearing the $80 billion mark. This figure is approximately ten times the levels seen earlier in 2024, with most of this growth occurring over the past six months. According to David Lawant, head of research at FalconX, the dynamics within the options market are increasingly influencing the underlying price movements of Bitcoin.
Market analysts are projecting resistance levels at $135,000, with some suggesting that Bitcoin could approach the $150,000 mark if current momentum is maintained. However, as leverage builds within the market, there is a heightened risk of volatility should any sharp downturns occur. Rachael Lucas, an analyst at BTC Markets, noted that the options markets are currently skewed toward a bullish sentiment, with over 60% of open interest tied to call options. While this reflects strong market conviction, it also poses the risk of liquidation cascades if the momentum falters.
October, often referred to as “Uptober” by cryptocurrency traders, has historically been Bitcoin’s strongest month for returns. Data indicates that over the past decade, Bitcoin has averaged gains of about 22.5% during October. In contrast, other digital assets are experiencing relatively less volatility; Ether remains steady at approximately $4,560, while XRP is stable just under $3.
