Bitcoin surged to a record high of $125,689 on Sunday in Asian trading, surpassing its previous peak of $124,514 set on August 14, as a broader risk-on rally fueled by the US government shutdown boosted demand for the world’s largest cryptocurrency.
The rally coincided with gains in US equities and renewed inflows into Bitcoin-linked exchange-traded funds (ETFs). Investors are betting that the shutdown will prompt a flight to so-called safe-haven assets, driving what traders have dubbed the “debasement trade.”
“With many assets — including equities, gold, and even collectibles like Pokémon cards — hitting all-time highs, it’s no surprise Bitcoin is benefitting from the dollar debasement narrative,” said Joshua Lim, co-head of markets at crypto prime brokerage FalconX.
Adding to the bullish tone is Bitcoin’s historical strength in October, often referred to as “Uptober.” The cryptocurrency has posted gains in nine of the past ten Octobers, continuing that trend this year with a 30% rise year-to-date.
Bitcoin’s sustained rally has also been supported by a friendlier regulatory environment in Washington under President Donald Trump, encouraging greater corporate participation. Companies such as Michael Saylor’s Strategy have continued to stockpile Bitcoin, a strategy that has since spread to other digital assets, including Ether.
Meanwhile, US stocks hit record highs on Friday, buoyed by major AI-driven deals and investor optimism despite weak business activity data. Treasuries and the US dollar weakened, while gold marked its seventh straight weekly gain, supported by central bank purchases and concerns over persistent inflation.
“The shutdown matters this time around,” said Geoff Kendrick, global head of digital assets research at Standard Chartered Plc, who expects Bitcoin to continue its upward trajectory. “Bitcoin is in a different place now compared to the 2018–2019 shutdown, when it moved less in sync with broader risk assets,” he added.
