Bitcoin hits all-time high today: Here we decode why
What's the story
Bitcoin, the world's largest cryptocurrency by market capitalization, has hit an all-time high of $125,689. The surge comes as part of a broader risk rally fueled by the US government shutdown that began on Wednesday. The increase in value is also attributed to rising US equities and renewed investments in Bitcoin-linked exchange-traded funds (ETFs).
Investor behavior
Bitcoin's rise unsurprising amid government shutdown
The ongoing US government shutdown has prompted investors to seek refuge in safe-haven assets, a trend known as the "debasement trade." Joshua Lim, co-head of markets at crypto prime brokerage FalconX, said Bitcoin's rise is no surprise given that other assets like equities and gold have also hit all-time highs. He added collectibles such as Pokemon cards are also part of this trend.
Seasonal trend
'Uptober' fuels Bitcoin's record-breaking performance
Adding to the bullish sentiment is Bitcoin's historical outperformance in October, a month it has dubbed "Uptober." The cryptocurrency has gained in nine of the last 10 Octobers. This seasonal trend, combined with the current market conditions, has contributed to Bitcoin's latest record-breaking performance.
Market dynamics
Year-long rally bolstered by legislative climate and corporate adoption
Bitcoin has been on a steady upward trajectory for most of the past year, thanks to a friendly legislative climate in Washington. Public companies have also contributed to this growth by adopting the corporate strategy of accumulating Bitcoin. This trend has even spread to smaller competitors like Ethereum, resulting in a widespread increase across digital assets.