Bitcoin has surged over 10% this week, surpassing the $120,000 mark for the first time since it peaked at over $124,000 on August 14. This substantial increase marks a striking 97% rise from the same time last year, when Bitcoin was trading around $60,700.
Experts credit this rally to various factors, including ongoing fiscal uncertainty from the recent government shutdown, which has drawn attention to alternative assets like Bitcoin and gold. John Haar, managing director at Swan Bitcoin, highlighted this trend, noting, “Over the longer term, with global debt at record highs and fiat currencies under pressure, Bitcoin is increasingly seen as a liquid, non-sovereign reserve asset. We’re witnessing a shift from speculative trades to strategic allocations, which we believe will drive the price beyond prior highs.”
Analysts from JPMorgan project a bullish outlook for Bitcoin, forecasting it could reach $165,000 by the end of the year. They attribute this potential rise to the increasing popularity of what they term the “debasement trade,” where retail investors are flocking to both gold and Bitcoin ETFs. This trade is influenced by multiple macroeconomic factors, such as growing geopolitical and policy uncertainties, declining confidence in fiat currencies in certain emerging markets, and persistently high government deficits in major economies.
In a similar vein, Citi analysts provided a 12-month price target for Bitcoin of $181,000, with an optimistic year-end projection of $132,000. These forecasts underscore the growing consensus among financial institutions that Bitcoin’s value is likely to continue escalating.
Geoff Kendrick, global head of digital assets research at Standard Chartered, emphasized that the government shutdown will significantly influence Bitcoin’s price trajectory. He pointed out that in contrast to the previous government shutdown under the Trump administration, Bitcoin’s relationship with U.S. government risks is much more pronounced this time around.
The surge in Bitcoin’s price has been accompanied by significant inflows into Bitcoin exchange-traded funds (ETFs), with a staggering $2.25 billion entering the market since Monday. Notably, BlackRock’s iShares Bitcoin Trust alone garnered $466.5 million in inflows on Thursday, as reported by SoSoValue data. Bloomberg analyst Eric Balchunas noted on social media that both IBIT and the SPDR Gold ETF were among the top 10 ETFs by volume on Thursday, indicating a heightened interest in what seems to be dubbed “The Debaser Trade.”
In corporate developments related to Bitcoin, MARA Holdings, the second-largest corporate Bitcoin holder, announced an increase in its holdings to 52,850 Bitcoin, along with a production of 736 Bitcoin in September, representing a 4% month-over-month increase. In contrast, Riot Platforms reported a September production of 445 Bitcoin, down from 477 in August, reflecting a 7% month-over-month decrease. Similarly, Cango released its September figures, reporting a production of 616.6 Bitcoin compared to 663.7 in August, also marking a 7% decline.
As sentiments shift and Bitcoin continues to hit new highs, market participants and analysts alike are keeping a close watch on the evolving dynamics and potential future developments in the cryptocurrency landscape.
