Bitcoin, the leading cryptocurrency, has recently achieved significant milestones, reclaiming the $120,000 level for the first time since August 14 on exchanges like Bitfinex, where it was seen trading around $120,020. This robust rally brings it steadily closer to its current record high of $124,128. This surge follows a period where Bitcoin was actively approaching the $120,000 mark, having hit a fresh six-week high of $109,250.

The cryptocurrency's "Uptober" performance has been notably strong, living up to its seasonal reputation despite some downplaying its importance. Polymarket bettors assign a 35% chance of Bitcoin reaching $130,000 this October, with the vast majority of market participants expecting it to top $126,000. There's also a 4% chance of the leading cryptocurrency surging to $150,000 within the month, though the odds of it skyrocketing to $200,000 within a single month remain low at just 1%.

This relentless rally has unfolded amidst the ongoing U.S. government shutdown, the first since 2018 and the 11th in modern U.S. history. This period of uncertainty, caused by a disagreement between Republicans and Democrats on federal spending, has seemingly bolstered the case for Bitcoin as a non-sovereign safe haven, driving increased demand. The shutdown is estimated to shed $15 billion in GDP on a weekly basis, and Polymarket bettors indicate only an 8% chance of it ending in the near future.

Interestingly, the rally in Bitcoin coincides with new record highs for both the S&P 500, the main stock market index, and gold. This unusual scenario, where both risk-on and risk-off assets are ascending, is largely attributed to expectations of two additional rate cuts in 2025, creating a broad-based market uplift.

Expert analysis further supports the bullish sentiment. Fidelity maintains that the current bull market remains "intact," noting an unprecedented 165 consecutive days with 90%+ of Bitcoin addresses in profit—the longest streak in its history. JPMorgan analysts have also turned bullish, opining that Bitcoin is undervalued compared to gold. They suggest Bitcoin's market cap would need to rise by 42% to match the total private sector investment in gold on a volatility-adjusted basis, highlighting a "significant upside" potential to $165,000, especially as the Bitcoin to gold volatility ratio continues to decrease.

However, the government shutdown has a dual impact. While seemingly boosting the crypto market's anemic price action, it has also likely delayed the approval of cryptocurrency exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC). ETF analyst Nate Geraci commented that "ETF Cryptober might be on hold for a bit," as the influential agency has furloughed approximately 90% of its entire workforce.