Bitcoin reclaims $120K as US shutdown fuels demand for safe-haven assets

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By Muyao Shen

  Bitcoin rose to $120,000 for the first time since setting a record high seven weeks ago as speculation increases that the US government shutdown will drive investors to safe-haven assets. 

 

The original cryptocurrency has long been referred to as “digital gold” by advocates, who see it serving a similar role as the precious metal during times of turmoil. Gold retreated from a record high Thursday. 

 

“For the first time in a while, the macro theme seems to have taken hold of Bitcoin, which has seen $1.5 billion of ETF inflows week to date, and appears to be attempting to catch up to gold’s eye-watering move of the last few weeks,” said Karim Dandashy, an over-the-counter trader at crypto trading firm Flowdesk.   

 

The largest digital-asset by market value rose for a sixth straight day, and is up about 10 per cent since Friday. Bitcoin was around 2 per cent higher at $120,163 as of 2:37 p.m. in New York. It reached a record $124,514 on Aug. 14.

 

Smaller, more volatile tokens were up even more, with Solana rising 5.7 per cent, Litecoin advancing 6.7 per cent and Dogecoin strengthening 4.7 per cent. Crypto-related stocks also rallied. Exchange operator Coinbase Global Inc. rose 7.8 per cent, Bitcoin treasury firm Strategy Inc. climbed 3.5 per cent and miner MARA Holdings Inc. edged up 2.1 per cent.

 

David Lawant, head of research at digital-asset prime brokerage firm FalconX, added that Bitcoin’s market structure has been waiting for a “breakout” for some times. 

 

“Spot order books have shown persistent sell-side skew for months without a decisive breakdown in price, signaling more absorption than apathy,” said Lawant. “That’s the classic coiled-spring dynamic, when overhead supply thins, rallies can come in sharp, cascading bursts. This could be the situation we are seeing right now in the market.”

 

Adding to the bullish sentiment is also the 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.

 

“September historically is the weakest month of the year for Bitcoin, and then Q4 is historically the strongest quarter of the year,” said Ryan Watkins, co-founder of crypto investment fund Syncracy Capital. “While I’m not the biggest believer in seasonality, I do think that it can oftentimes be a self-fulfilling prophecy.”