Bitcoin hits $125K; Q4 outlook remains bullish

Bitcoin hit a new all-time high of $125,296.58 during Asian trading on Sunday, trading around $124,801 as of 08:25 GMT. The surge follows a dip below $110,000 in late September and a recovery that saw it close at $120,350 last Friday, the highest in seven weeks. October has historically been a strong month for Bitcoin, contributing to renewed investor interest.

Why bitcoin is surging again

Bitcoin’s recent gains are largely driven by institutional interest through US spot Bitcoin ETFs. These funds offer exposure to Bitcoin without direct ownership, attracting consistent capital inflows and improving market liquidity.

Investor concerns over the US fiscal deficit, rising national debt, and a weakening dollar have increased demand for decentralised assets like Bitcoin. Historically, Bitcoin has delivered positive returns in October in 8 of the past 10 years. This pattern has contributed to increased market activity and buying momentum.

With US debt exceeding $35 trillion and persistent inflation, investors are turning to assets that resist value erosion. Bitcoin’s limited supply of 21 million coins makes it a scarce alternative to traditional currencies. As central banks expand money supply to support economies, Bitcoin is increasingly viewed as a hedge against currency debasement. Investors across regions are adopting decentralised assets to manage geopolitical and economic risks. Bitcoin’s accessibility supports its role in diversified portfolios.

Is rally above $125K sustainable?

Justin d’Anethan, Head of Partnerships at Arctic Digital, a crypto private markets firm, speaks exclusively with AIBC about the forces behind Bitcoin’s recent rally and what could lie ahead for crypto markets. According to him, while prices have already seen a retracement, indicating quick flows triggering liquidations both upwards and downwards, the medium-term outlook appears stronger than many sceptics would expect. However, the path likely won’t be linear.

d’Anethan explained, “ETF inflows lit the spark, but what’s keeping it alive is a slow-burning supply shock. Exchange reserves are at six-year lows, and this shows large players and sophisticated allocators taking coins off trading venues and into some custody setup. And that means there’s not much BTC available to sell. Pair that with steady bid pressure from ETFs and positive rate expectations going into year-end, and you drive prices higher (it’s supply and demand, like in Econ 101).”

d’Anethan points out that in crypto, prices often become their own narrative, a breakout sparks conversation, interest, and capital inflows. d’Anethan noted, “What’s noteworthy is that it’s seemingly not fuelled by retail (yet!) and seems to be a deliberate accumulation by more institutional investors. Where some see froth, I see the middle of the market, no euphoria, just a trend that pushes us upward.”

Outlook for crypto markets through Q4 2025

Looking ahead to the rest of the year, d’Anethan notes that macroeconomic sentiment is playing a leading role. Strong equity markets and resilient gold prices are setting a favourable backdrop. If the US Federal Reserve begins cutting rates and fiscal concerns stay in the spotlight, Bitcoin’s status as “digital gold” could be further cemented, not just among hedge funds, but potentially even with sovereign entities and corporate treasuries seeking neutral, hard assets.

He further stated, “ETH and blue-chip tokens should keep benefiting from all this, as investors rotate capital further along the risk curve, especially if there are real revenues and a clear business (infrastructure, real-world assets, stablecoins, gaming, things that compete with existing frameworks in finance, payments, and entertainment).”

Still, despite the optimistic tone, d’Anethan admits he’s currently taking a cautious stance with his own portfolio. He added, “Prices are high, and so I’m in a holding pattern, although that’s not financial advice.” Nonetheless, he remains bullish on what Q4 could bring for the crypto space.

October’s impact on Bitcoin

Historically, October has delivered consistent gains for Bitcoin, with traders often building positions in September. Data shows that the month has frequently marked the start of upward price movements. Current technical indicators, including strong RSI levels, increased trading volume, and support forming near $120,000, suggest the rally may continue.

The 2025 rally differs from previous cycles by being driven primarily by institutional investment, rather than retail speculation. This shift has introduced more structured strategies and larger capital flows.

Bitcoin price outlook

Potential catalysts include Federal Reserve policy decisions, the 2026 Bitcoin halving, and corporate adoption announcements. Each may influence future price movements. Bitcoin’s market dominance has risen above 54 percent, indicating capital concentration before potential rotation into altcoins. Ethereum, Solana, and other layer-1 networks are also gaining, though at a slower pace.

Bitcoin’s rise above $125,000 reflects its growing role as a mainstream financial asset. Institutional investment, macroeconomic factors, and seasonal trends continue to support its position in global markets.