Bitcoin price and the broader crypto market are going up this October or Uptober, as it is commonly known. BTC jumped to a record high of $125,725 on Monday, continuing a recovery that started late last month when it bottomed at $108,662.
The broader crypto market has also done well in the past few days. As a result, the market capitalization of all coins has jumped to over $4.36 trillion today. This article highlights some of the top reasons why BTC and other altcoins are in a strong bull run this year.
Bitcoin price soaring as safe-haven bets jump
The first main reason why the Bitcoin price is in a strong uptrend this month is that it has become a safe-haven asset as the government shutdown has occurred this year. This also explains why the gold price has soared in the past few days, hitting a record high.
Investors see Bitcoin as a safe haven for several reasons. One, it has some of the best tokenomics among major assets because its supply is capped at 21 million and most of the coins have already been mined.
Of the mined ones, millions of the coins have been lost permanently, while millions others are held by companies that have no intention to sell. As a result, the supply of Bitcoin in exchanges has continued falling this year.
At the same time, the Bitcoin supply rate adjusts every four years because of the halving event that slashes the block reward given to miners. As such, the Bitcoin mining difficulty has constantly been in a strong uptrend over time.
Therefore, Bitcoin is seeing strong demand as supply growth slows. One sign that the Bitcoin demand is soaring is that ETF inflows have continued soaring.
They jumped by almost $1 billion on Monday, bringing the cumulative inflows to over $61.25 billion and the total amount in these funds at $170 billion.
The iShares Bitcoin Trust (IBIT) has moved to $100 billion in assets, while Fidelity’s FBTC has $26 billion in assets.
Crypto market rising as Fed interest rate cuts odds jump
The crypto market has also soared as investors reflected on the recent Federal Reserve interest rate cut. It slashed interest rates by 0.25% to between 4.0% and 4.25% and hinted that it will deliver more cuts later this year.
The possibility of another cut rose after ADP published a weak jobs report last week. It noted that the economy lost 36,000 jobs in October after losing another 3,000 in the previous month.
Another report by the ISM showed that the services PMI dropped significantly in October as business conditions worsened.
Therefore, the bank will likely cut interest rates by 0.25% this month now that the government shutdown will hurt the economy. Bitcoin and the crypto market normally thrive when the bank is cutting interest rates or when it embraces a dovish tone.
Altcoin ETF approvals and October seasonality
The other main catalyst for the Bitcoin and the crypto market rally is that Donald Trump has sounded open to talk with Democrats on Healthcare to end the shutdown.
Such a move would benefit the crypto market by ensuring that the Securities and Exchange Commission goes back to work and starts approving ETFs on altcoins like XRP, Cardano, and Solana.
Also, the crypto market is doing well because of seasonality reasons. Bitcoin and other crypto prices normally perform well in October, with the average BTC return since 2013 being about 79%.
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