Bitcoin Reaches $126K Peak: The Endless Value Debate

Bitcoin Hits All-Time High Of $126,000 Then Corrects: Digital Gold Or Financial Bubble?

 

In early October 2025, Bitcoin made history by surpassing the $126,000 mark, igniting a wave of optimism across the cryptocurrency market. However, this rapid ascent was quickly followed by a significant correction, reigniting the enduring debates about the true value and sustainability of this controversial digital asset.

 

Bitcoin's Historic Peak In Early October 2025

 

In the early hours of October 7, 2025 (Vietnam time), Bitcoin experienced a spectacular surge, reaching $126,069, setting a new price record for the world's largest cryptocurrency. Other figures, such as $126,064, $125,500, $125,449.77, and $126,186.0, were also recorded during the same period, pushing the total cryptocurrency market capitalization to $4.27 trillion.

 

Factors Driving The Record Growth

 

   • Institutional Inflows: A key driver was the increasing participation of institutional investors and more crypto-friendly policies under US President Donald Trump. Spot Bitcoin ETFs in the US recorded net inflows of $3.2 billion in the first week of October alone, indicating strong demand from financial institutions.

 

   • Supply Scarcity: The total amount of Bitcoin held on exchanges dropped to a record low (around 2.83 million BTC), with over 114,000 BTC withdrawn from exchanges in two weeks. This suggests a dominant long-term investment sentiment, leading to a "supply squeeze" as demand outstripped supply.

 

   • Macroeconomic and Policy Environment: Expectations of a Fed interest rate cut in September, the US government shutdown in early October due to budget disagreements, and pro-crypto policies under President Trump all bolstered confidence in Bitcoin as a hedge asset.

 

   • "Uptober" Effect: Historically, October is known as "Uptober," a period of strong upward price movement for Bitcoin, with an average return of 21.9%.

 

   • Market Sentiment: The prevailing sentiment at the peak was "extreme greed" (Crypto Fear & Greed Index reached 71 points), coupled with organic accumulation from small to medium-sized wallets.

 

The Rapid Correction After The Historic Peak

 

After reaching its peak, Bitcoin quickly underwent a correction. By noon on October 7, the price had slightly receded to around $124,600. However, the most significant drop occurred on October 10-11, when Bitcoin plunged below $112,000, even touching $102,000 at one point.

 

Causes Of The Correction

 

   • Profit-Taking: A large amount of profit-taking activity took place after the peak.

 

   • "Extreme Greed" and "Supply in Profit": Historically, when the "supply in profit" ratio exceeds 99% (as it did in early October), the market often experiences short-term corrections of 3% to 10%.

 

   • Liquidation Pressure: The sharp decline led to the liquidation of over $7 billion in leveraged positions across the market on October 10, with a total of over $19 billion in long and short positions liquidated within 24 hours.

 

   • President Trump's Tariff Announcement: The most significant factor causing the sharp price drop was President Donald Trump's unexpected announcement of 100% tariffs on Chinese goods, made on the afternoon of October 10 (US time) during a period of low global liquidity, leading to heightened volatility and a shift to "fear" sentiment (Fear & Greed Index dropped from 71 to 27).

 

The Ongoing Asset Value Debate: "Digital Gold" Or "Financial Bubble"?

 

Bitcoin's dramatic ascent and swift decline continue to fuel the long-standing debate about its nature and value.

 

Arguments Supporting Bitcoin As A Valuable Asset

 

Many experts view Bitcoin as "digital gold" or an alternative store of value, capable of hedging against inflation. Samson Mow, CEO of JAN3, even predicted Bitcoin could reach $500,000, becoming the second-largest asset after gold.

 

   • Limited Supply and Decentralization: A fixed supply of 21 million coins and its decentralized nature are unique characteristics that ensure long-term demand and give it an edge over gold in a world of expanding fiscal policies.

 

   • Increasing Adoption: The approval of ETFs and the potential for nations to accumulate Bitcoin in their national reserves suggest Bitcoin is entering mainstream finance.

 

   • Constructive Volatility: Some analysts argue that current volatility is "the constructive type of volatility – characteristic of the price discovery phase in a maturing market," and a "reconfiguration, not a temporary rally."

 

Skepticism And Risk Warnings

 

   • Critics like Hargreaves Lansdown assert that "Bitcoin is not an asset class" and "has no intrinsic value."

 

 - Eugene Fama, the "father of modern finance" and Nobel laureate in economics, even stated that Bitcoin "violates every rule of a medium of exchange" and has "a probability close to 1" of becoming worthless within a decade due to its lack of stable real value.

 

   • High Volatility and Bubble Risk: Bitcoin is infamous for its wild price swings and high risk, having experienced several severe downturns. Experts warn of financial bubble concerns, similar to the dot-com bubble of 1999.

 

   • Energy Consumption: Bitcoin mining demands excessive energy consumption, drawing criticism from environmentalists.

 

   • Technological and Regulatory Risks: Despite blockchain's high security, technological vulnerabilities, cyberattacks, or shifts in legal regulations could lead to significant investor losses.

 

Market Sentiment And Expert Reactions

 

Market sentiment swiftly shifted from "extreme greed" (71 points) at Bitcoin's peak to "fear" (27 points) after the plunge caused by Trump's tariff announcement. Many experts see this dip as a "cleansing" event, making the market healthier, reducing leverage, and setting the stage for the next growth cycle.

 

Historical Context And Future Outlook

 

October has long been known as "Uptober," with a history of strong Bitcoin growth. Despite corrections, Bitcoin has repeatedly demonstrated its ability to recover from market crashes.

 

Future predictions vary widely:

 

   • Some experts anticipate Bitcoin could reach $140,000 by late 2025, or even $200,000 - $270,000 in the short term if ETF inflows remain strong.

 

   • Standard Chartered Bank forecasts Bitcoin to hit $200,000 by end of 2025 and potentially $500,000 by 2028.

 

   • However, there are also warnings of a potential "crypto winter" (bear market) in Q1 2026 after this rally.

 

Bitcoin's historic peak above $126,000 in early October 2025, followed by a rapid correction due to macroeconomic and policy factors, highlights the dynamic and complex nature of this market. The debate over whether Bitcoin is "digital gold" or a "worthless financial bubble" continues, with strong arguments from both sides.

 

Disclaimer: This article is intended solely to provide information and market insights at the time of publication. We make no promises or guarantees regarding performance, returns, or the absolute accuracy of the data. All investment decisions are the sole responsibility of the reader.