Bitcoin Price Just Shy of Record High. How Shutdowns Fuel Crypto Rallies.

Bitcoin, the world’s largest cryptocurrency, hit an all-time high of more than $125,000 over the weekend. (Marco Bello/Getty Images)

Key Points

• Bitcoin’s price rose 1.2% to $124,645 over 24 hours, with a seven-day gain of 8.7% and a 30-day gain of 13%.
• The cryptocurrency reached an all-time high of over $125,000, though reduced Sunday liquidity amplified the move.
• Bitcoin’s increase, along with gold’s 1.4% rise, may be linked to the ongoing government shutdown and concerns about fiat currencies.

The price of Bitcoin traded just shy of its record high on Monday. The world’s largest cryptocurrency touched an all-time high of $125,659.68 on Sunday as investors took stock of a government shutdown with no end in sight.

Bitcoin is up 2.1% over the past 24 hours at $125,323, according to CoinDesk. Since the start of the year, Bitcoin is up about 30%.

Some investors are seeking safer alternatives as political concerns take center stage in the U.S. Gold , a traditional safe-haven asset, also reached a new high on Monday.

Created with Highcharts 9.0.1Bitcoin priceSource: CoinDeskNote: XBX indexAs of Oct. 6

Created with Highcharts 9.0.12025Oct.70,00080,00090,000100,000110,000120,000$130,000

“One of the likely reasons for the growth of cryptocurrencies in the last week was the suspension of the U.S. government’s work on 1 October,” Kuptsikevich said Monday. “During three of the last five shutdowns, there was also an increase in Bitcoin, as traders fear a fall in the value of fiat currencies, which also plays into the hands of gold and stocks.”

Talks between Democrats and Republicans to end the shutdown, which is currently in its sixth day, have reached a stalemate, with neither side willing to compromise on their demands. Prediction site PolyMarket puts the odds of the shutdown ending before Oct. 15 at roughly 30%, with nearly three-quarters of bettors wagering the government won’t reopen before that date.

Among other cryptocurrencies, Ether rose 3.2% over the past 24 hours, while XRP fell 4.2%. The S&P 500 and Nasdaq Composite, meanwhile, rose 0.3% and 0.6%, respectively, early Monday.

The dollar climbed 0.7% against a weighted basket of other currencies but remains down nearly 10% since the start of the year.

Write to Elsa Ohlen at elsa.ohlen@barrons.com