In today’s crypto news, Bitcoin surged to a new high on Sunday, Stripe’s CEO asserts that stablecoins will compel banks to provide genuine interest on deposits, and US-listed spot Bitcoin exchange-traded funds (ETFs) began October with billions in inflows.
Analysts predict Bitcoin rally to $125,000 driven by US government shutdown and macro factors
Bitcoin reached a new all-time high over the weekend, leading analysts to suggest a renewed accumulation phase that could propel its price to $150,000 by the year’s end.
Bitcoin (BTC) hit a record high of over $125,700, with its market cap briefly exceeding $2.5 trillion for the first time in cryptocurrency history, as reported by Cointelegraph on Sunday.
This rally was bolstered by several macroeconomic influences, including the recent US government shutdown — the first since 2018 — which some analysts believe has reinvigorated interest in Bitcoin’s role as a store of value.
Historically, similar situations have been associated with “major price milestones,” according to Fabian Dori, chief investment officer at digital asset banking group Sygnum Bank.
The US government shutdown has sparked “renewed discussion around Bitcoin’s store-of-value role, as political dysfunction highlights interest in decentralised assets,” Dori explained to Cointelegraph. “Simultaneously, the broader environment — marked by loose liquidity conditions, a service-led business cycle acceleration, and narrowing underperformance compared to equities and gold — has brought digital assets into focus,” he added.
Stripe CEO asserts stablecoins will compel banks to enhance interest rates on deposits
Stripe’s CEO Patrick Collison stated that stablecoins will push banks to offer better interest rates to customers due to the emergence of yield-bearing stablecoin alternatives.
Collison highlighted the average savings rates for deposits in the United States and Europe, which are well below 1%, as vulnerable to disruption by stablecoins. He wrote:
“Depositors are going to, and should, earn something closer to a market return on their capital. Some lobbies are currently pushing post-GENIUS to further restrict any kinds of rewards associated with stablecoin deposits. The business imperative here is clear — cheap deposits are great, but being so consumer-hostile feels to me like a losing position.”
The stablecoin market capitalization surpassed $292 billion in October, according to data from RWA.XYZ, as the sector continued to expand following a major regulatory bill enacted in the United States.
Bitcoin ETFs launch “Uptober” with $3.2 billion in second-best week ever
US-listed spot Bitcoin ETFs kicked off the historically bullish month of October with their second-highest week of inflows since inception, indicating renewed investor confidence.
Spot Bitcoin (BTC) ETFs recorded $3.24 billion in cumulative net positive inflows over the past week, coming close to their record of $3.38 billion from the week ending Nov. 22, 2024, according to data from SoSoValue.
This figure represents a significant rebound from the previous week’s outflows of $902 million. Analysts attribute this resurgence to rising expectations of another US interest rate cut, enhancing sentiment towards risk assets.
Increased anticipation of a US interest rate reduction triggered a “shift in sentiment,” drawing renewed investor interest in Bitcoin ETFs, “resulting in four-week inflows nearing $4 billion,” stated Iliya Kalchev, dispatch analyst at digital asset platform Nexo, to Cointelegraph. “At current rates, Q4 flows could eliminate over 100,000 BTC from circulation — more than double the new issuance.”
“ETF absorption is picking up while long-term holder distribution decreases, aiding BTC in forming a stronger base,” near crucial technical support levels, he commented.
Ongoing ETF inflows may provide substantial support for Bitcoin in October, historically the second-best month for Bitcoin regarding average returns, often termed “Uptober” by crypto enthusiasts.
This week’s $3.2 billion briefly elevated Bitcoin’s price above $123,996 on Friday, reaching an over six-week peak last seen on Aug. 14 for the world’s original cryptocurrency, TradingView data indicates.
