BITCOIN set another all-time high as a broader risk rally around the US government shutdown buoyed the world’s largest cryptocurrency.
The token climbed to as high as US$125,689 on Sunday (Oct 5) in Asia, topping its previous record set on Aug 14, supported by the uptick in US equities and renewed inflows into Bitcoin-linked exchange-traded funds. Investors have speculated that the shutdown, which kicked in on Wednesday, will drive investors to safe-haven assets in what market participants have begun to call the “debasement trade”.
“With many assets including equities, gold and even collectibles like Pokemon 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 firm FalconX.
Adding to the bullish sentiment is Bitcoin’s historical outperformance in the month of October, which has earned the nickname “Uptober”. The token has gained in nine of the past 10 Octobers.
The largest digital-asset by market value reached the previous high of US$124,514 on Aug 14, and is now up more than 30 per cent this year.
Bitcoin has been steadily rising for most of the past year as a result of the friendly legislative climate in Washington ushered in by President Donald Trump. Public companies, led by Michael Saylor’s Strategy, have boosted the demand by following an increasingly popular corporate tactic of stockpiling the original cryptocurrency. The playbook has spread to smaller competitors, such as Ether, leading to a broad rise across digital assets.
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US stocks touched record highs on Friday amid another round of big-ticket artificial intelligence deals and partnerships, bucking the prospect of a prolonged shutdown and a gloomy reading on business activity. Treasuries and the US dollar slid. Gold was on track for a seventh weekly gain, fuelled by central bank buying amid falling US interest rates and lingering inflation concerns.
“The shutdown matters this time around,” said Geoff Kendrick, global head of digital assets research at Standard Chartered, adding that he expects Bitcoin to rise during this period. He noted that Bitcoin was “in a different place” during the previous shutdown between 2018 and 2019, when the token traded less in line with traditional risk assets.
