Bitcoin surged to an all-time high over the weekend amid rising investor anxiety over the U.S. government shutdown and eroding confidence in fiat currencies.
The world’s largest cryptocurrency reached $125,689 in early Sunday, surpassing its prior mid-August high and maintaining its strong trajectory in 2025. This milestone comes as investors reassess their exposure to traditional markets and currencies.
Analysts contend that the shutdown, combined with rising inflation and expanding government deficits, has prompted a renewed shift in investor behavior. Consequently, there is an increased interest in alternative stores of value, including Bitcoin and gold.
Shutdown Spurs Demand for “Safe Havens”
According to Bloomberg, the budget stalemate in Washington has intensified investor interest in assets resistant to currency devaluation, a trend traders call the “debasement trade.”
Bitcoin, alongside gold and select equities, has seen strong inflows as investors brace for economic disruption.
“Many investors are treating Bitcoin like digital gold,” said Joshua Lim, co-head of markets at FalconX. “As fears around dollar weakness grow, it’s no surprise the asset is benefiting from the debasement narrative.”
Economic Pressures Deepen Market Shift
Several factors are feeding this safe-haven appetite. Persistent U.S. inflation, ballooning government debt, and uncertainty over Federal Reserve policy have all eroded confidence in the stability of fiat currencies.
In emerging markets, this erosion of trust is even more pronounced, prompting greater adoption of crypto.
“The shutdown matters more this time,” said Geoff Kendrick, global head of digital assets research at Standard Chartered. “Bitcoin now trades as part of the global risk complex and the market is treating it as a serious macro hedge.”
‘Uptober’ Trend Boosts Optimism
Meanwhile, October has historically been one of Bitcoin’s strongest months, a pattern known among traders as “Uptober.”
Data shows Bitcoin has finished higher in nine of the past ten Octobers. This, in turn, contributes seasonal optimism to an already bullish setup.
Furthermore, this trend, paired with renewed inflows into Bitcoin-linked ETFs, has helped reinforce positive momentum. Likewise, the broader risk environment, including record U.S. equity highs and surging demand for artificial intelligence stocks, has also contributed to Bitcoin’s upward trajectory.
Gold, too, is gaining, extending a seven-week winning streak amid central bank buying and falling real interest rates.
Institutional Players and Policy Tailwinds
Institutional support remains another pillar of Bitcoin’s rally. For context, public companies, led by Michael Saylor’s Strategy, have continued to add Bitcoin to their balance sheets. Moreover, that corporate playbook, once considered risky, has since gained traction across multiple sectors.
Supportive policy signals from the Trump administration, particularly around digital asset regulation and taxation, have also encouraged investment across the crypto space.
JPMorgan Predicts Bitcoin Price to Hit $165,000
Earlier this month, JPMorgan analysts projected that Bitcoin could rise to around $165,000. This estimate assumes that its volatility relative to gold will continue to decline.
The bank’s team, led by Nikolaos Panigirtzoglou, observed that Bitcoin’s volatility-to-gold ratio has fallen below 2.0. Therefore, the asset’s risk-adjusted profile is improving gradually.
Based on that ratio, JPMorgan estimates Bitcoin’s current $2.3 trillion market capitalization could increase by roughly 42%. If realized, this growth would put it on par with the $6 trillion in private investment currently held in gold via ETFs, bars, and coins.
The report notes Bitcoin has shifted from being overvalued at the end of 2024 to significantly undervalued now, suggesting strong upside potential if macro trends persist.
At press time, Bitcoin was trading near $124,866, up 1.2% in the past 24 hours and more than 30% year-to-date. Its total market capitalization now exceeds $2.48 trillion, reinforcing its dominance over the broader cryptocurrency market.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
