Bitcoin surged to a new record high above $126,000 on Monday, extending gains as investors sought shelter from political and economic uncertainty.
The milestone added to a powerful run that has seen the cryptocurrency nearly double in value over the past year.
The world’s largest digital asset climbed as high as $126,080 after breaching the $125,000 mark for the first time on Sunday.
It later steadied at $124,712, still up 0.6% and on track for a second straight session of gains. Ether rose 3.4% to $4,676, XRP edged up 0.4% to $2.98, while BNB gained 3.6% to $1,215.
US Government Shutdown Spurs $6B Shift Into Cryptocurrencies
Analysts pointed to a confluence of factors driving demand. Institutional inflows into Bitcoin funds have surged, friendlier policies under US President Donald Trump have helped sentiment and weakness in the US dollar has encouraged investors to diversify.
The dollar index, which tracks the greenback against a basket of major currencies, held flat at 98.18 on Monday but remains down nearly 10% this year.
The ongoing US government shutdown, now in its second week, has amplified the move. With lawmakers deadlocked and economic data releases delayed, investors have funneled more than $6b into cryptocurrencies in search of safety.
Gold has also rallied, topping $4,000 per ounce, strengthening Bitcoin’s narrative as “digital gold.”
Spot Bitcoin ETFs Draw $3.24B As Supply Hits Six-Year Low
Spot Bitcoin ETFs have been central to the rally. BlackRock and Fidelity’s products drew $3.24b in net inflows last week, their second-highest tally since launch. Centralized exchanges are also reporting the lowest Bitcoin reserves in six years at just 2.83m coins, pointing to tightening supply that has magnified buying pressure.
Ryan Lee, chief analyst at Bitget, said Bitcoin could sustain its climb in the near term. He noted investors may see a test of $130,000 if ETF momentum continues to build.
Lee also expects Ethereum to rebound toward the $4,800–$5,000 range on the back of Bitcoin’s strength and upcoming technical upgrades.
Market participants stressed that the rally reflects both resilience and maturing integration with traditional finance. “This rally highlights the sector’s resilience and the accelerating integration of crypto into traditional portfolios,” Lee added, pointing to institutional participation and innovation as key long-term drivers.
Bitcoin Supply At Multi-Year Lows Adds Pressure To Upside Momentum
Others emphasized the cyclical nature of the move. Shivam Thakral, CEO of BuyUcoin, said the pattern of capital rotation was typical. “Bitcoin’s rally is pretty normal early in a bull run as investors usually pile into Bitcoin first because it feels safer and more stable,” he said.
He added that altcoins were likely to benefit once profit-taking sets in. “Alt season isn’t dead, just on pause. Once Bitcoin cools off and traders start taking profits, stronger altcoins like Ethereum, Solana, and Chainlink could shine. The market’s not giving up on alts; it’s just getting smarter and focusing on real value instead of hype.”
With supply at multi-year lows and inflows building, traders say the market backdrop favors further gains. Support levels around $117,300 are holding, and if momentum endures, Bitcoin could test new highs toward $140,000 in the coming weeks.
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