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| Bitcoin breaks its all-time price record. |
Bitcoin set a new record on Sunday, breaking above $125,000 for the first time in its history. The world's largest cryptocurrency reached a peak of $125,689 during Asian trading hours, according to data from Bloomberg . This move surpassed its previous all-time high of approximately $124,500 set in mid-August .
The price surge marks a sharp reversal from a volatile September. It puts Bitcoin's gains for October alone at over 9% . The cryptocurrency is now up 34% since the start of the year and has more than doubled in value over the past 12 months .
A powerful mix of Wall Street demand and macroeconomic fears is driving the rally. Record inflows into new U.S. spot Bitcoin ETFs have met with a weakening U.S. dollar and a government shutdown. This has created what one analyst called a "perfect storm" for the digital asset .
Institutional demand, channeled through Bitcoin exchange-traded funds, forms a core part of the rally. U.S.-listed spot Bitcoin ETFs recorded a massive $3.24 billion in net inflows for the week ended October 3 . This was the second-largest weekly inflow on record. It shows deep and sustained interest from professional investors.
BlackRock's IBIT ETF has seen particular success. It recently broke into the top 20 U.S. ETFs by assets under management. The fund crossed $90 billion in assets, making its rise among the fastest in ETF history . This embrace by traditional finance has given Bitcoin a new layer of legitimacy and access.
Macroeconomic uncertainty is also playing a major role. The ongoing U.S. government shutdown, which began last week, has shaken investor confidence. This has delayed key economic data and clouded the outlook for the American economy . In response, investors are moving money into assets they see as safe havens.
Market experts call this the "debasement trade." It reflects a fear that government debt and spending could weaken the U.S. dollar over time . Bitcoin is increasingly seen as a store of value in this environment, similar to gold.
"The broader setup remains bullish," said Joe DiPasquale of BitBull Capital. He noted that a long government shutdown could drive more interest in hard assets like Bitcoin .
The Federal Reserve's recent shift in policy has added more fuel to the rally. Last month, the Fed made its first interest rate cut since December 2024 . Market expectations for more cuts are high. A weaker dollar and lower interest rates tend to help riskier assets like Bitcoin.
Major financial institutions have updated their price targets in response to the strong momentum. Analysts at British bank Standard Chartered expect Bitcoin to reach $135,000 in the near term. They believe it could top $200,000 before the end of the year . JPMorgan analysts recently raised their end-of-year target to $165,000 . They argue Bitcoin is catching up to gold's price run as investors play the "debasement trade" .
The current rally differs from past Bitcoin booms. In 2020 and 2021, retail investors and stimulus checks drove the market. Now, the infrastructure of institutional investing is firmly in place. This includes spot ETFs and clearer regulations .
Alex Blume, an institutional investment advisor, offered a note of caution. He suggested that leveraged trading, not just spot demand, might be partly driving this move. This could make the current rally somewhat precarious.
Despite this, the overall mood in the market is positive. October, often called "Uptober" by crypto traders, has historically been a strong month for Bitcoin. The token has gained in nine of the past ten years during this period . With the new record high now breached, analysts will watch to see if the momentum can hold.