Bitcoin News Today: Bitcoin Hits $126K as Shutdown Fuels Safe-Haven Demand

Bitcoin surged past $126,000 in October 2025, marking a record high and reigniting bullish momentum in the cryptocurrency market. The price rally, driven by seasonal optimism and strong demand for Bitcoin ETFs, has positioned the asset as a key beneficiary of the U.S. government shutdown, which began on October 1. Investors flocked to perceived safe-haven assets, with Bitcoin's price more than doubling in the past year and Ethereum (ETH) rising 5% to $4,700. XRP and ADA also saw modest gains, reflecting broader market confidence .

The options market has become a critical barometer for Bitcoin's trajectory, with open interest in BTC options reaching $80 billion, rivaling the size of the futures market for the first time Bitcoin Option Traders Eye $140,000 After Record-Setting Rally^[3]. Deribit and BlackRock's iShares Bitcoin Trust (IBIT) have emerged as dominant platforms, attracting diverse strategies from institutional hedging to speculative trading. Call spreads-where traders buy lower-strike calls and sell higher-strike calls-dominate short-term positioning, particularly around $130,000 to $140,000 strike prices. Analysts note that these strategies balance potential upside with limited downside risk, though volatility spikes or macroeconomic shocks could disrupt the trend FOMOing into BTC? Check out These Bullish BTC Plays Favored^[1].

The U.S. government shutdown amplified Bitcoin's appeal as an alternative asset. With key economic data delayed, including nonfarm payrolls, investors turned to crypto for portfolio diversification. Bitcoin ETFs saw $3.2 billion in inflows last week, with BlackRock's IBIT alone amassing $49.8 billion in notional open interest. This surge aligns with broader trends, as October-historically Bitcoin's strongest month-has delivered average gains of 22.5% over the past decade .

While Bitcoin's rally has outpaced other major cryptocurrencies, Ethereum and altcoins like XRP and ADA remain relevant in the bullish narrative. Ether's implied volatility has held firmer than Bitcoin's, supported by staking and DeFi flows, while XRP and ADA's modest gains reflect a market prioritizing Bitcoin's dominance. However, analysts caution that profit-taking and sudden corrections cannot be ruled out, particularly as miners and large holders continue to monetize Bitcoin through options sales Bitcoin Option Traders Eye $140,000 After Record-Setting Rally^[3].

Market participants are closely monitoring the interplay between spot and derivatives markets. FalconX reported that options flows now rival spot trades in shaping Bitcoin's price action, with institutions leveraging Deribit for short-term risk management and IBIT for long-term positioning. Implied volatility has trended lower in 2025, suggesting relative complacency, though the spread between implied and realized volatility remains intact. A sharp rise in realized volatility-triggered by regulatory changes or macroeconomic shocks-could disrupt the current equilibrium Bitcoin Option Traders Eye $140,000 After Record-Setting Rally^[3].

Experts project that Bitcoin's rally could extend into year-end if macroeconomic conditions remain favorable. Adam McCarthy of Kaiko noted that subdued liquidations ($283 million in the past 24 hours, compared to $2 billion in late September) indicate a market in balance. However, the Federal Reserve's policy trajectory and potential regulatory actions remain key uncertainties. For now, bulls control the narrative, with Bitcoin options traders eyeing $140,000 as the next psychological threshold .