Bitcoin (BTC-USD) surged past $122,000 per token on Friday as investors turned towards cryptocurrency amidst uncertainties surrounding a potential US government shutdown, buoyed by seasonal trends that promote risk-taking.
The significant weekly uptick, marking the strongest performance since April, places the leading cryptocurrency just shy of its all-time high from August, which was slightly above $124,000.
Historically, October has been Bitcoin’s most robust month, with the asset gaining value in 10 out of the last 12 years, as noted by Compass Point Research, prompting many in the crypto community to affectionately nickname this month “Uptober.”
Moreover, the trend typically continues into the fourth quarter, with Bitcoin appreciating in four of the past five Q4s.
This uptick usually follows a decline in September; however, this year, Bitcoin finished September 4% higher, “setting a higher expectation for October’s returns,” according to analyst Ed Engel from Compass Point.
Recent volatility saw Bitcoin dip close to $108,000 before a market rebound took place. Engel suggested that “false downside breakouts often create a bullish environment, especially preceding a seasonally strong October.”
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Analysts on Wall Street are also identifying potential catalysts beyond the calendar that could enhance October’s performance.
Currently, the Treasury General Account — which functions as the government’s checking account — is mostly filled, alleviating fears that liquidity might be siphoned from assets like crypto and redirected into bonds. At the same time, the activity surrounding stablecoins following the enactment of pivotal legislation in July has provided an additional layer of support to the cryptocurrency market.
“The next wave of crypto adoption, in my opinion, will originate from the increased use of stablecoins. This trend is likely to positively impact the crypto landscape overall,” shared Samir Kerbage, Chief Investment Officer at Hashdex, in a recent discussion with Yahoo Finance. “We may see the effect of this trend reflected in prices within the next six months to a year.”
The supply of USDC, the stablecoin from issuer Circle (CRCL), has seen a 19% quarter-over-quarter increase, bringing it to $73.6 billion. This marks a notable rise from a mere 2% growth in the previous quarter, as highlighted by Jeff Cantwell, an analyst at Seaport Research Partners.
Learn more: Understanding stablecoins
Cantwell noted, “Ultimately, the growth in USDC circulation has been remarkably strong in Q3 — it arrives at a particularly favorable moment leading into Q4, which has traditionally been a strong season for cryptocurrencies.”
Additionally, Cantwell pointed out that the demand for Circle’s stablecoin is distributed across multiple blockchains, with 62% on Ethereum (ETH-USD), 14% on Solana (SOL-USD), and 8% on Hyperliquid (HYPE).
