Bitcoin hit US$125,689 on Sunday, surpassing its previous all-time high of $124,480 set on 14 August this year.
The rally comes as the U.S. Government shutdown enters its fourth day, with investors moving capital into Bitcoin and gold in what market participants are calling the "debasement trade."
U.S. spot Bitcoin ETFs recorded $3.24 billion in net inflows during the first week of the shutdown - the largest weekly inflow of 2025 and the second-largest since the products launched in January 2024.
BlackRock's IBIT led the surge with over $1 billion in inflows across three trading days, pushing total assets to $90.7 billion.
The fund entered the top 20 ETFs globally by assets for the first time.
Total cumulative inflows across all Bitcoin ETFs have now reached approximately $60 billion since launch, with year-to-date inflows hitting $23 billion.
Corporate holdings surge
Strategy (formerly MicroStrategy) holds 640,031 BTC, purchased at an average price of $73,983 per bitcoin.
At current prices near $125,000, the company's holdings are worth ~$80 billion.
The company executed a $21 billion common stock offering in Q1 2025 to acquire 301,335 additional BTC.
MSTR shares increased 50% during the same period.
Over 70 publicly traded companies worldwide have now adopted bitcoin as a treasury reserve asset.
Institutional positioning
Bitcoin futures open interest reached an all-time high of $32.6 billion on centralised derivatives exchanges.
Nearly $200 million in short positions were liquidated as prices climbed past $120,000.
Standard Chartered analysts forecast bitcoin reaching $135,000 in the near term, with a year-end target of $200,000.
Meanwhike, JPMorgan analysts project $165,000 by year-end, citing bitcoin's utility as a hedge against currency debasement.
Daily bitcoin volatility has dropped from 4.2% pre-ETF to 1.8% in the post-ETF era, according to institutional data.
Market dynamics
The Federal Reserve cut interest rates by 25 basis points in September, with additional cuts expected.
Private payroll data showed the economy lost 36,000 jobs in September, strengthening the case for continued monetary easing.
The government shutdown has delayed key economic reports, including the Bureau of Labor Statistics employment data - delaying data for things like rate decisions.
Bitcoin has historically performed well in October, with positive returns in 10 years.
History shows that positive September closes have been followed by fourth-quarter rallies averaging over 50% in years including recently in 2023 and 2024.
The shutdown is also delaying SEC reviews of pending altcoin ETF applications, including products tied to Solana, XRP, Litecoin, and Dogecoin.