Bitcoin Price Hits Record High Surpassing $125,000

SadaNews - Bitcoin has recorded a new historic high amid a broader rise in high-risk assets due to the U.S. government shutdown, which has supported the world’s largest cryptocurrency.

The currency rose to $125,689 in trading on Sunday in Asia, surpassing its previous high recorded on August 14, supported by a rise in U.S. stocks and renewed inflows into Bitcoin-related exchange-traded funds.

The world’s largest cryptocurrency pared its gains to around $123,000 by 09:54 GMT.

Investors speculate that the government shutdown that began on Wednesday will push investors toward safe assets, with market participants beginning to refer to it as the "currency devaluation (dollar) trade."

The declining dollar narrative supports demand for cryptocurrency

Joshua Lim, co-head of markets at the digital asset brokerage FalconX, said, "With many assets, including stocks and gold, as well as collectibles like Pokémon cards, reaching new record levels, it’s not surprising that Bitcoin is benefiting from the depreciating dollar narrative."

Historic October fuels optimism

Adding to the positive mood is Bitcoin’s strong historical performance in October, which has earned the title "Uptober," as the cryptocurrency has posted gains in nine of the last ten October months.

Thus, the price of the leading digital currency has surpassed its previous record high of $124,514, recorded on August 14, rising more than 30% since the beginning of the year.

Supportive legislative environment in Washington enhances gains

Bitcoin has steadily risen over the past year, thanks to the favorable legislative environment in Washington backed by President Donald Trump.

Demand has also increased due to public companies, led by Michael Saylor’s company "MicroStrategy," which has adopted a growing institutional approach involving the storage of the original cryptocurrency.

This approach has extended to smaller competitors like "Ether," resulting in a broad rise in digital assets overall.

U.S. stocks reached record levels on Friday, driven by a new wave of deals and partnerships in the artificial intelligence sector, ignoring the prospects of a prolonged government shutdown and negative data on business activity.

Conversely, Treasury bonds and the dollar fell, while gold was on the verge of achieving a seventh consecutive weekly gain, driven by central bank purchases amidst a decline in U.S. interest rates and ongoing inflation concerns.

Standard Chartered: "This shutdown is different"

Jeff Kendrick, head of global digital asset research at Standard Chartered, said, "The government shutdown has a tangible impact this time," adding that he expects Bitcoin to rise during this period.

He noted that the cryptocurrency was "in a different position" during the previous shutdown between 2018 and 2019 when it did not move in line with traditional high-risk assets.