This October, Bitcoin’s gradual ascent to a new record has reignited discussions on whether the subsequent surge could lead to a sustained climb to $150,000.
This enthusiasm stems from a rise in derivatives positioning and ETF inflows, hinting that institutional pressure might be influencing the cycle’s peak rather than merely sparking another speculative surge.
Derivatives market sparks interest
Traders on Derive.xyz appear confident, believing the leading digital asset is on an upward trajectory.
Data shared with CryptoSlate indicates that contracts set to expire before October’s end show a marked lean towards the upside, suggesting expectations for a leap up to $150,000.
Dean Dawson, the head of research at Derive, asserts that this trend signifies more than just hope. He remarked:
“Bitcoin’s volatility is set to break out. Implied volatilities for 14, 30, and 90-day expiries have risen to their highest in the last month, indicating a buildup of anticipation for significant movements ahead.”
However, this potential movement is not happening in a vacuum. It’s being evaluated alongside macroeconomic factors, notably the widespread expectation of a 25-basis-point rate reduction from the Federal Reserve this month. Traders on Polymarket place these odds at approximately 90%, and this sentiment has affected various liquidity-sensitive asset classes.
Rate reductions diminish the real yield on cash, making higher-beta assets like Bitcoin more appealing. Current data suggests that volatility is linked to liquidity, which appears to be increasing once more.
Spot Bitcoin ETF inflows
This influx of liquidity is most evident in spot Bitcoin ETFs, which provide a clear lens into institutional sentiment.
So far in October, 12 funds have attracted over $5 billion in new investments and are on track to exceed the previous record of $6.49 billion established last November, coinciding with Bitcoin’s first breach of the $100,000 threshold.
In support of this perspective, CryptoQuant noted that the Coinbase Premium Index, a measure of institutional demand in the U.S., has maintained a positive trend for 42 consecutive days, highlighting steady accumulation by regulated investors.
A report from K33 Research indicates that Bitcoin’s average 30-day return during positive ETF flows is 8.2%. When monthly inflows surpass 20,000 BTC, this number rises to 23.6%, compared to a -4% rate during outflow phases from 2020 to 2023.
The conclusion is clear: as structured investment vehicles draw in capital, BTC is quietly taken out of circulation, reducing the float. If this trend continues, the current inflow momentum could propel Bitcoin towards $130,000 to $150,000 without the need for a speculative frenzy.
Exchange supply declines
Another positive sign for BTC’s advancement towards $150,000 is the decrease in exchange-held supply.
Glassnode data indicates that exchange reserves have fallen to a long-term low of 2.838 million BTC, comprising 14.24% of total supply. This observation is echoed by Bitwise, which reported that large BTC holders removed 49,158 BTC last week, marking the 143rd largest outflow recorded.
According to the firm:
“[While] these transactions may relate to internal exchange movements, the increase in buy-side volumes coupled with diminishing exchange balances underlines the truth of this observation.”
Furthermore, the asset management company found that realized profits among short-term holders totaled just $3.07 billion last week, significantly below one-third of the numbers seen at the 2021 peak.
This indicates that the market is rising without a rush to sell. Coins are vanishing from exchanges without flooding back as prices increase. This setup is ideal for supply tightening and, consequently, price acceleration.
Favorable macroeconomic conditions for Bitcoin
Beyond specifics related to crypto, the global economic landscape is subtly bolstering Bitcoin’s potential rise.
According to Bitwise, escalating geopolitical risks and ongoing inflation have rendered stability challenging in the United States. Concurrently, global borrowing has surged, putting pressure on fiat currencies and rekindling interest in tangible assets like gold.
Gold, historically seen as a traditional hedge, has increased by 50.03% year-to-date, outperforming Bitcoin’s recent performance. However, this strength has divided investor opinion.
One view suggests that gold’s surge is overextended, leading to reallocations into alternatives like Bitcoin, which also serves as a hedge against currency devaluation at a lower valuation premium. Conversely, another perspective expects gold to maintain its dominance, bolstered by central bank purchases, retail buying in China, and uncertainties surrounding President Trump’s trade policies.
Regardless, the liquidity landscape benefits both assets. Central banks appear ready to sustain accommodating monetary policies, including lower rates, potential yield curve control, and expanded balance sheets, which could drive capital into the markets. Liquidity often flows to the edges of institutional risk mandates, where Bitcoin increasingly fits.
As a result, investors from both sides of the “store-of-value” debate may exhibit similar behaviors. Those reallocating from gold may turn towards digital assets seeking significant upside, while traditional investors chasing higher returns will likely find Bitcoin supported by the same liquidity trends.
In conclusion, both narratives converge towards a single outcome: a resurgence of capital inflows into digital assets, spurred by a global quest for security amid an era of ongoing monetary expansion.
