Bitcoin Tops $126,000, Market Awaits Fed Move

Bitcoin Surpasses $126,000: Crypto Market Holds Breath for Fed's Next Move

 

In early October 2025, the cryptocurrency world witnessed a historic milestone as Bitcoin (BTC) officially broke all previous price records, soaring past the $126,000 mark. Specifically, the leading digital asset reached an all-time high of $125,245.57 on October 5th, and further set a new peak of $126,198.07 just one day later. This spectacular growth propelled Bitcoin's market capitalization beyond $2.5 trillion, solidifying its strong position in the global financial system.

 

While Bitcoin has seen a slight correction and stabilized around $121,000 - $122,000 after its peak, the market continues to exude strong appeal. Its impressive growth over the past year, with over 90% within 12 months and 10.5% since early August, indicates sustained investor confidence. Notably, September 2025 saw BTC rise by over 5%, defying its usual bearish trend for the month.

 

Key Drivers Behind Bitcoin's Monumental Surge

 

Several factors converged to provide a powerful boost to Bitcoin:

 

 - "Uptober" Sentiment: October is often dubbed "Uptober" within the crypto community, fueled by the belief that it's a month prone to significant price increases. Historical data supports this, with Bitcoin having risen in 10 out of the last 12 Octobers, averaging over 20% gains.

 

 - Massive Inflows into US Spot Bitcoin ETFs: This has been the most significant driver. In the first week of October, these ETFs recorded net inflows of $3.24 billion, marking the second-strongest inflow week since their inception. BlackRock's IBIT fund led the charge with nearly $900 million in inflows on October 7th alone, underscoring confidence in reputable, low-cost funds. Total ETF inflows are approaching $30 billion, demonstrating deep liquidity capable of handling large institutional orders.

 

 - More Accommodative US Policies: The Trump administration's crypto-friendly policies, including regulatory changes like the repeal of SAB 121 (an accounting rule that previously constrained financial institutions) and the exploration of a national digital asset reserve, have reportedly encouraged central banks to invest in Bitcoin.

 

 - Institutional Investor Demand: This demand continues to strengthen, underpinning price stability.

 

 - "Debasement Trade" Trend: Concerns over geopolitical risks, high government debt, and a weakening USD are driving investors to alternative safe-haven assets like gold and Bitcoin.

 

Fed Interest Rate Cut Expectations: Anticipation of the Federal Reserve cutting interest rates by late 2025 reduces the cost of holding Bitcoin, attracting further capital.

 

USD Decline and US Government Shutdown: These factors also contribute to Bitcoin's appeal as a non-government-backed asset.

 

Market Holds Breath for the Fed's Next Move

 

Currently, all eyes in the crypto market are on the U.S. Federal Reserve and upcoming macroeconomic events, which are crucial factors that could shape Bitcoin's short-term trajectory:

 

 - FOMC Meeting Minutes (October 8, 2025): The minutes from the September Federal Open Market Committee meeting will offer deeper insights into the Fed's first interest rate cut in nine months, bringing the federal funds rate down to 4.00-4.25%. The internal divergence within the Fed regarding the future path of interest rate cuts will be a key point of interest for investors.

 

 - Fed Chair Jerome Powell's Speech (October 9, 2025): Mr. Powell will address inflation trends, a cooling US labor market, and economic risks stemming from the budget impasse in Washington.

 

 - A "dovish" tone from the Fed, suggesting further policy easing or concerns about economic growth, could provide a significant boost to Bitcoin. Conversely, "hawkish" signals would trigger selling pressure.

 

The Fed's interest rate decisions directly impact the attractiveness of riskier assets like cryptocurrencies compared to traditional assets.

 

Market Outlook: Could Bitcoin Surpass $200,000?

 

 - After its peak, Bitcoin is now in a consolidation phase. If strong ETF inflows persist, some analysts predict BTC could reach $140,000 or even $150,000 before the end of 2025.

 

Long-term, experts remain highly optimistic:

 

 - Standard Chartered: Forecasts Bitcoin to hit $200,000 by the end of 2025 and $500,000 by 2028.

 

 - VanEck: Targets $180,000 by 2025 and $644,000 by the 2028 halving cycle.

 

 - Some technical analysis models even project $303,000 during the 2025-2026 cycle.

 

 - The Pi Cycle Top indicator also reinforces a $200,000 price target, suggesting significant room for Bitcoin's growth.

 

 - Declining confidence in traditional currencies is driving capital towards Bitcoin and gold as alternative stores of value.

 

However, the cryptocurrency market always carries inherent risks due to its high volatility, including regulatory changes, competition from other blockchains, and criticisms regarding its lack of intrinsic value or market manipulation potential.

 

Conclusion

 

Bitcoin has had an impressive start to October with new record highs, supported by optimistic "Uptober" sentiment and robust inflows into US spot ETFs. While currently in a "wait-and-see" phase ahead of key policy moves from the Fed, the long-term outlook for Bitcoin remains very bright. Investors should closely monitor macroeconomic indicators and the Fed's actions to make informed decisions in this dynamic yet challenging market.

 

Disclaimer: The content above reflects the author’s personal views and does not represent any official position of Cobic News. The information provided is for informational purposes only and should not be considered as investment advice from Cobic News.