Bitcoin News Today: Bitcoin's Surge: A Hedge Against Dollar Erosion and Policy Volatility

Bitcoin prices surged to a record high of $125,689 on October 5, 2025, as a confluence of macroeconomic, regulatory, and geopolitical factors created a "perfect storm" of bullish momentum. The cryptocurrency's rally was driven by a combination of Federal Reserve rate-cut expectations, the rise of institutional-grade Bitcoin exchange-traded funds (ETFs), and speculative fervor over U.S. President Donald Trump's proposed $2,000 tariff "dividend" for AmericansForbes‘It’s Happening So Fast’—Crypto ‘Floodgates Opening’ Predicted To Send Bitcoin Price To $1 MillionBy^[1]. Analysts attributed the surge to a weakening U.S. dollar, sustained inflows into crypto-linked ETFs, and renewed demand from both institutional and retail investors.

The Federal Reserve's pivot toward aggressive rate cuts has weakened the dollar, fueling demand for risk assets like Bitcoin. David Siemer, CEO of Wave Digital Assets, highlighted that ETF inflows are pulling in institutional capital at an unprecedented pace, while the Fed's accommodative stance has boosted risk appetite across marketsForbes‘It’s Happening So Fast’—Crypto ‘Floodgates Opening’ Predicted To Send Bitcoin Price To $1 MillionBy^[1]. Meanwhile, the U.S. government shutdown, which began in late September, has intensified concerns over dollar stability, prompting investors to flock to Bitcoin and gold as "safe-haven" assets. This phenomenon, dubbed the "debasement trade," reflects growing skepticism about the U.S. currency's long-term valueBitcoin Rises to a Record as ‘Debasement’ Trade Spurs Risk Rally^[2].

Trump's proposed tariff-based stimulus checks, modeled after the 2020-2021 pandemic-era payments, have further stoked market speculation. Bitfinex analysts noted that such a policy could mirror the 2020 rally, where stimulus checks drove retail investors into crypto and Bitcoin prices surgedForbes‘It’s Happening So Fast’—Crypto ‘Floodgates Opening’ Predicted To Send Bitcoin Price To $1 MillionBy^[1]. Treasury data revealed that Trump's current tariff agenda generated $150 billion in fiscal year 2024-2025, with the claiming annual revenues could exceed $1 trillionForbes‘It’s Happening So Fast’—Crypto ‘Floodgates Opening’ Predicted To Send Bitcoin Price To $1 MillionBy^[1]. While the plan remains unimplemented, its mere possibility has amplified Bitcoin's appeal as a hedge against perceived dollar debasement.

Historical trends also bolstered the bullish narrative. October, long known as "Uptober" in crypto circles, has seen Bitcoin gain in nine of the past 10 years. Joshua Lim of FalconX attributed the recent rally to a combination of "Uptober" optimism, ETF-driven demand, and broader market enthusiasm for risk assetsBitcoin Rises to a Record as ‘Debasement’ Trade Spurs Risk Rally^[2]. Institutional adoption has accelerated since 2023, with corporate stockpiling of Bitcoin-led by firms like MicroStrategy-further solidifying its status as a legitimate asset classBitcoin Rises to a Record as ‘Debasement’ Trade Spurs Risk Rally^[2].

Looking ahead, analysts have issued ambitious price forecasts. CryptoQuant's Bull-Bear Market Cycle Indicator suggests Bitcoin could reach $160,000 to $200,000 by year-end if current demand trends persistBitcoin Price Prediction: Indicator Points to $200K by End of 2025^[3]. A key threshold lies at the Trader's Realized Price of $116,000; a sustained breakout above this level would signal a transition into a "bull" phase, potentially unlocking a new valuation bandBitcoin Price Prediction: Indicator Points to $200K by End of 2025^[3]. Meanwhile, individual experts have projected a range of targets, from $139,000 to $195,000, citing metrics like MVRV pricing bands and cycle indicators.

The surge has also reignited debates about Bitcoin's role in a post-Fed world. Geoff Kendrick of Standard Chartered noted that Bitcoin's performance during the 2018-2019 shutdown was muted, but its current alignment with traditional risk assets suggests a more integrated market dynamicBitcoin Rises to a Record as ‘Debasement’ Trade Spurs Risk Rally^[2]. With ETF inflows, regulatory clarity, and macroeconomic uncertainty converging, Bitcoin's trajectory remains closely tied to broader financial system trends.