On October 2, Bitcoin briefly surpassed $121,000, marking its highest level since mid August, while Ethereum broke above $4,500 for the first time in three weeks. After a slight pullback, BTC traded near $119,892 and ETH at $4,471, maintaining much of their gains. The surge coincided with the partial U.S. government shutdown that began on October 1, a scenario historically linked with stock market strength, which has also bolstered crypto performance. Record gold prices above $3,900 have further fueled Bitcoin’s narrative as a hedge against currency depreciation.
The rally extended beyond digital assets, with Coinbase shares jumping over 7%, while recently listed firms Bullish and Circle gained 11% and 16%, respectively. Institutional inflows were another key driver, with nearly $2.4 billion pouring into Bitcoin and Ethereum ETFs over the week. Growing open interest and balanced spreads suggest the uptrend is being driven by institutional capital rather than speculative bursts.
Despite political uncertainty, historical data shows no lasting damage to risk assets during U.S. government shutdowns. Analysts at JPMorgan now forecast Bitcoin could reach $165,000 by year-end, citing parity with gold adjusted for volatility. Market observers also point to strong seasonal trends, with October often called “Uptober” averaging 14% gains since 2013.
On the monetary policy front, CME FedWatch data signals a 98% chance the Federal Reserve will cut rates by 25 basis points at its October 29 meeting, continuing the easing cycle that began in September after a four-year pause. This dovish backdrop, combined with ETF inflows and gold driven valuation gaps, supports the case for crypto testing new all-time highs in the coming months.