Bitcoin Hits $122K High as Crypto Funds See Inflows

The cryptocurrency market has demonstrated remarkable resilience and growth, underscoring a burgeoning investor confidence and a broader acceptance of digital assets as a viable investment class. This period of expansion is characterized by significant inflows into exchange-traded funds, notable acquisitions by key industry players, and strategic developments aimed at enhancing the utility and accessibility of cryptocurrencies.

Bitcoin’s Ascending Trajectory

Bitcoin has concluded September with a notable gain exceeding 5%, defying historical trends that typically see a market correction during this period. The digital asset’s strength was further emphasized in early October, as it surged past the $121,000 mark on October 3rd, ultimately setting a new all-time high and trading at approximately $122,851. This upward momentum has continued to draw significant attention from market analysts and institutional investors.

The mining difficulty for Bitcoin has also reached an all-time high, increasing by 5.97% to 150.84 terahashes (T). This marks the seventh consecutive increase, a metric that, while indicating a robust network, can reduce miner profitability. Despite this, expert sentiment remains largely optimistic. Analysts at CryptoQuant foresee Bitcoin’s ascent toward $130,000, anticipating significant market shifts. Furthermore, JPMorgan Chase analysts suggest Bitcoin is undervalued relative to gold, projecting a potential price target of $165,000 to align with its role as a store of value for risk capital.

Michael Saylor, co-founder of MicroStrategy, shared insights into the company’s business model and Bitcoin’s role as an economic hedge, emphasizing its function during times of financial paradigm shifts. In parallel, Starknet has introduced Bitcoin staking and a $100 million incentive program designed to foster the growth of Bitcoin-based Decentralized Finance (DeFi), aiming to enhance liquidity and credit markets within the BTCFi ecosystem.

Tether recently bolstered its Bitcoin holdings with a significant purchase of 8,888 BTC, valued at approximately $1 billion, bringing its total Bitcoin reserves to 86,000 BTC. Meanwhile, a proposal has emerged in Sweden from Members of Parliament advocating for the establishment of a national Bitcoin reserve. This initiative aims to safeguard national assets against inflation and economic instability, while also seeking official clarification on the country’s stance regarding a central bank digital currency (CBDC).

Ethereum’s Shifting Dynamics

In contrast to Bitcoin’s performance, Ethereum experienced a less favorable September, declining by 5.71%. The asset largely traded within a sideways pattern for most of the month, followed by a correction towards its end. Despite this monthly downturn, Ethereum, like the broader market, saw positive price action in early October. It briefly surpassed the $4,500 level on October 2nd and 3rd, though it struggled to maintain that position. At the time of reporting, Ethereum was trading around $4,547.

Bit Digital has announced plans to raise $100 million through the issuance of convertible bonds. These funds are earmarked primarily for acquiring Ethereum, as well as for general corporate purposes including potential investments and acquisitions in the digital asset space, reinforcing Bit Digital’s position as a significant corporate holder of Ethereum.

Crypto Fund Flows and ETF Landscape

The past week has seen a notable shift in capital flows for cryptocurrency investment funds. Following a net outflow of nearly $1.7 billion from spot Bitcoin and Ethereum ETFs between September 22nd and 26th, the period from September 29th to October 3rd registered substantial inflows. Spot Bitcoin ETFs experienced a net inflow of $3.24 billion, while Ethereum ETFs attracted $1.3 billion, according to data from SoSoValue.

Kazakhstan has launched the Alem Crypto Fund, a privately managed fund with governmental backing, marking its initial investment with the acquisition of BNB tokens. The outlook for new cryptocurrency ETFs remains strong, with Bloomberg Intelligence analyst Eric Balchunas predicting a 100% probability of launches, particularly following the SEC’s proposed new rules for product registration. In a significant move, Rex Shares and Osprey Funds have submitted applications for 21 altcoin-based ETFs, designed for expedited review under the Company Act of 1940.

Regulatory Developments and Policy Adjustments

Poland’s Sejm has approved a contentious crypto-asset law that includes provisions for significant penalties and prison sentences. This legislation aims to integrate the EU’s MiCA regulation into national law, granting the Polish Financial Supervision Authority (KNF) expanded powers to license crypto-service providers, oversee token issuance, and impose substantial fines.

Meanwhile, Pavel Durov, co-founder of Telegram, has accused French intelligence services of attempting to censor opposition channels within the Moldovan context during elections, alleging offers of leniency in exchange for compliance. Reports from Turkey indicate that the nation’s financial regulator, MASAK, is set to receive enhanced authority to block crypto accounts, freeze assets across financial platforms, and blacklist illicit cryptocurrency addresses.

In Ukraine, over 2,500 amendments have been proposed to the virtual assets bill, indicating a complex legislative process before its second reading. In New York, authorities are considering a mining tax of up to $0.05 per kilowatt-hour to address rising energy consumption and provide relief to households facing increased utility costs.

Advances in Artificial Intelligence

OpenAI has unveiled Sora 2, an advanced video generation model that reportedly surpasses its predecessor in physical accuracy and its ability to depict complex actions, including dialogue and sound effect synchronization. Meta Platforms has entered into a substantial $14.2 billion agreement with CoreWeave for AI infrastructure, securing access to Nvidia’s GB300 systems. Anthropic has launched Claude Sonnet 4.5, a large language model touted for its superior performance in programming tasks.

Bloomberg reports that OpenAI has become the world’s most valuable private company, with an estimated valuation of $500 billion, surpassing SpaceX. This valuation follows a secondary share sale to investors amounting to approximately $6.6 billion. Pavel Durov has also announced the establishment of an AI laboratory in Kazakhstan, a project anticipated to impact over a billion users. Jeff Bezos, co-founder of Amazon, described the current AI investment boom as a “bubble with great returns,” acknowledging both speculative inflation and significant long-term sector potential.

Economic and Political Incidents

The U.S. government has experienced a shutdown due to a budget impasse, resulting in unpaid furloughs for federal employees. This event has exerted a notable influence on both equity and cryptocurrency markets. Arthur Hayes, speaking at TOKEN2049 in Singapore, warned of an impending financial crisis in Europe, citing France’s economic situation and recommending a strategic divestment from European assets. Reports from the Financial Times suggest that Grayscale Investments is preparing for an Initial Public Offering (IPO), despite ongoing legal challenges related to its Genesis lending arm.

The integrated Telegram Wallet is set to introduce trading for tokenized U.S. stocks, allowing users to purchase and hold these assets starting in October. Elon Musk’s net worth has reportedly reached $500 billion, driven by the appreciation of Tesla stock, positioning him as a potential future trillionaire. Pavel Durov revealed that he acquired thousands of Bitcoins at approximately $700 each, a substantial holding that supports his lifestyle, and projected Bitcoin’s future value to reach $1 million.