Bitcoin Shatters Records at $126,000: How the US Government Shutdown Is Fueling a Crypto Surge

Bitcoin Reaches Historic High of $126,000 Amid US Government Shutdown

Bitcoin has surged to unprecedented heights, reaching a new all-time high of $126,000 as investors flock to the cryptocurrency amid the ongoing US government shutdown. This remarkable rally has been fueled by what analysts are now calling the "devaluation trade" as market participants seek shelter from potential dollar depreciation.

The US Shutdown and Its Impact on Bitcoin

Since October 1st, the United States has entered a government shutdown due to budget paralysis. This situation has sparked concerns among investors about potential massive money printing by the Federal Reserve to offset the economic impact of the shutdown. As a result, there has been a significant rush toward inflation-hedging assets, with Bitcoin leading the charge.

This latest price surge has pushed Bitcoin beyond its previous historic high of $124,000 reached in August 2025, cementing its position as a perceived store of value during times of economic uncertainty.

Understanding the "Devaluation Trade"

The term "devaluation trade" refers to the investment strategy where traders seek protection against the potential devaluation of the US dollar due to increased money printing by the Federal Reserve. This monetary expansion is anticipated as necessary to counteract the economic effects of the government shutdown in the United States.

In this context, Bitcoin, often regarded as a store of value and inflation hedge, has seen its price skyrocket. The cryptocurrency reached a new record of $126,000, surpassing its previous peak of $124,000 established in August 2025.

Bitcoin ETFs See Massive Inflows

Alongside Bitcoin's price increase, Bitcoin-based Exchange-Traded Funds (ETFs) have experienced a substantial influx of capital. According to Bloomberg data, Bitcoin ETFs recorded net inflows of $1.5 billion over the past week, bringing their total to $45 billion.

These massive inflows into Bitcoin ETFs reflect the growing interest from institutional investors in Bitcoin as a hedge against inflation and dollar devaluation. The trend underscores Bitcoin's evolving role in traditional investment portfolios as a strategic asset during economic uncertainty.

Bitcoin Confirms Its Status as a Safe Haven

As the US government shutdown continues, investors are increasingly turning to Bitcoin as protection against dollar devaluation. With a new historic record of $126,000, BTC is confirming its status as a safe haven asset in the face of global economic uncertainties.

The cryptocurrency's performance during this period of fiscal uncertainty in the United States highlights its growing acceptance as a legitimate alternative to traditional safe-haven assets like gold. Institutional investors, in particular, appear to be embracing Bitcoin's potential as a hedge against inflation and currency debasement.

Looking Forward

The current situation presents a real-world test of Bitcoin's value proposition as "digital gold." As the shutdown in the United States persists and concerns about potential monetary policy responses grow, market participants will be watching closely to see if Bitcoin can maintain its upward momentum and continue to attract investment flows.

For now, the cryptocurrency has clearly demonstrated its appeal during times of economic stress, reaching new price territories that would have seemed impossible just a few years ago.