Bitcoin and Gold reached new highs

Gold extended its record-breaking rally on Monday, with prices surging to $3,944.81 per ounce during the Asian session, according to ActivTrades data — already exceeding the latest price targets recently set by major global banks. The metal’s rise comes as the ongoing U.S. government shutdown amplifies expectations of further Federal Reserve rate cuts, driving investors toward safe-haven assets.

The move places Gold well above the $3,800 to $3,900 range projected by UBS and Commerzbank, which only weeks ago lifted their 2025–2026 forecasts. Both banks cited a mix of dollar weakness, persistent geopolitical tensions, and strong central bank demand as key tailwinds.
At the same time, Bitcoin also reached a new high above $125,000, extending a powerful rally mostly driven by ETF inflows and renewed institutional interest. With both Gold and Bitcoin hitting record or near-record levels, many are wondering if the momentum can last for both of these alternative assets.

Gold prices supported by US shutdown and a Weaker Yen

U.S. Government Shutdown Fuels Fed Cut Expectations and Gold Demand

Gold prices remain buoyed as the U.S. government shutdown enters its second week, with no sign of compromise between Republicans and Democrats. The stalemate, triggered by partisan disputes over spending priorities, shows little progress, echoing previous shutdowns that lasted weeks and caused widespread economic disruption.

Although the immediate economic impact has been limited, pressure is mounting. By mid-October, millions of federal employees are set to miss paychecks, potentially curbing consumer spending and slowing growth. The absence of official economic data during the shutdown will likely complicate the Federal Reserve’s policy decisions and force analysts and traders to rely on private reports for clues about the economy’s health.

Markets are confident that the Fed will deliver another quarter-point rate cut by the end of the month. Lower interest rates typically make non-yielding assets like Gold more attractive. Investment flows into Gold-backed exchange-traded funds (ETFs) have also strengthened the rally, with total holdings expanding at the fastest pace in over three years.

Gold Daily Chart - Source: ActivTrades

The metal has already surged nearly 50% this year, supported by the Fed’s ongoing easing cycle, heightened geopolitical risks, and central bank efforts to diversify away from the U.S. dollar. The “buy-the-dip” mentality has become entrenched among investors seeking protection against policy uncertainty and market volatility. 

Yen Weakness adds momentum to Gold’s safe-haven appeal

The weakening Japanese yen has provided an additional tailwind for Gold, as investors look for alternative safe-haven assets. Following the election of Sanae Takaichi as the new leader of Japan’s ruling Liberal Democratic Party (LDP), the yen tumbled against the U.S. dollar — its sharpest drop in five months — breaking through the psychologically important ¥150 per dollar level.

Daily USD/JPY Chart - Source: ActivTrades’ Online Platform

Takaichi’s victory has sparked expectations of increased fiscal stimulus in Japan and sustained pressure on the Bank of Japan to maintain ultra-low interest rates, further undermining the yen’s strength. With the Japanese yen losing its traditional safe-haven status, investors have turned to Gold as a more reliable store of value amid global uncertainty.

The shift highlights Gold’s enduring role as a hedge against currency volatility and economic instability. In an environment where traditional safe-haven assets are under strain, bullion’s combination of liquidity and intrinsic value continues to attract both institutional and retail investors seeking protection against policy and market shocks.

Bitcoin prices already up more than 8% in October to a new record high

Bitcoin Extends Rally to New Highs as Bitcoin ETF Inflows and U.S. Equity Gains Boost Momentum.

Bitcoin has surged to a new all-time high above $125,697 on Monday, according to ActivTrades data, marking its first record since August and extending its remarkable rebound of nearly 67% from the lows seen in April 2025. Today, Bitcoin extended its winning streak to a ninth consecutive session.

Bitcoin Daily Price - Source: TradingView

Although prices have eased slightly from that peak, the world’s largest cryptocurrency remains on a strong upward trajectory, rising more than 8% so far in October and more than 32% in 2025. The sustained rally has pushed Bitcoin’s market capitalization to roughly $2.46 trillion, according to CoinMarketCap — a valuation comparable to that of the largest corporations in the S&P 500.

For many investors, spot Bitcoin ETFs have made exposure to the asset easier and safer. These funds allow investors to gain direct price exposure to Bitcoin without the operational challenges of self-custody, such as managing digital wallets or safeguarding private keys. According to a Wall Street Journal survey, holding a spot Bitcoin ETF is now viewed as nearly equivalent to owning the cryptocurrency itself since 2024 in terms of overall returns and minimizing tracking error, helping to draw a broader investor base into the market.

Bitcoin’s historically bullish October performance is fueling the current overall bullish sentiment, with the month—known in crypto circles as "Uptober"—having posted gains in seven of the last eight years. This trend is being reinforced by renewed investor optimism towards the US-listed spot Bitcoin ETFs, which many view as the new market’s sentiment barometer. These ETFs began the month with their second-best week of inflows since launch, recording a substantial $3.24 billion in cumulative net positive inflows last week.

The “Debasement Trade” Gains Traction as Investors Hedge with Bitcoin and Gold

JPMorgan analysts noted early October that the so-called “debasement trade” — a strategy where investors buy assets like Gold and Bitcoin to hedge against fiat currency devaluation — is gaining momentum. Both retail and institutional investors have been increasing allocations to these alternative stores of value amid rising geopolitical tensions, swelling government debt, and a weakening U.S. dollar.

The strategy has accelerated notably since late 2024, as global investors seek protection from fiscal imbalances and inflationary pressures. According to JPMorgan’s data, ETF inflows into both Gold and Bitcoin surged during the third quarter of 2025, marking the strongest pace since the final months of last year.

Bitcoin ETFs, in particular, saw robust inflows following President Donald Trump’s April 2 announcement of new tariffs, which heightened concerns about the U.S.-China trade relations and the global growth outlook. Gold ETFs began catching up by August, narrowing the gap between the two asset classes as investors diversified their defensive positions.

This growing correlation between Gold and Bitcoin underscores a broader shift in investor psychology: Bitcoin is increasingly viewed not just as speculative plays, but as a somewhat legitimate hedge against policy missteps, sovereign debt burdens, and currency debasement.

More broadly, these developments highlight how the crypto industry continues to mature and attract mainstream capital. With rising institutional adoption, expanding ETF offerings, and renewed faith in Bitcoin’s resilience, the world’s most prominent digital asset is once again asserting itself as a core component of the modern investment landscape.

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