Bitcoin Hits $126K Record High: XRP, ETH, ADA Rally as ETF Inflows and US Shutdown Boost Crypto Market

Bitcoin (BTC) surged to an unprecedented $126,223 on Monday, driven by converging factors including the ongoing U.S. government shutdown, a weaker U.S. dollar, and substantial spot ETF inflows that tightened supply and extended the bullish momentum. At press time, BTC was trading around $124,000, cementing a 15% weekly gain that propelled major cryptocurrencies upward across the board. The rally extended beyond dollar terms, with Bitcoin achieving record highs in euros (€106,000) and Swiss francs (CHF 99,600). Japan's signals of returning to Abenomics-style easing further fueled market optimism about future liquidity conditions, as highlighted by CoinDesk analyst Omkar Godbole. Ethereum (ETH) climbed 4% to $4,700, reaching its highest level in three weeks, with traders targeting the $4,800-$5,000 range if momentum persists. BNB emerged as a standout performer, soaring over 20% weekly to record highs above $1,240, indicating rotation into ecosystem assets. Other major altcoins followed suit: Dogecoin (DOGE) gained 6% to $0.26, XRP approached $3, and Solana (SOL) surged over 12% in the past seven days. Market breadth remained strong, with total cryptocurrency capitalization peaking at $4.27 trillion before settling at $4.24 trillion. The sentiment index registered 71 (greed), nearing August levels but leaving room for further expansion without signs of a market top. The ETF-driven rally saw weekly spot Bitcoin ETF inflows reach $3.2 billion - the highest since November 2024 and second-largest on record - bringing total allocations since January above $60 billion according to SoSoValue data. Bitget's chief analyst Ryan Lee noted: "Bitcoin's climb above $124,000, fueled by $3.2 billion in spot ETF inflows, underscores deepening institutional conviction and a maturing market narrative." Meanwhile, BTC exchange balances dropped to a six-year low of 2.83 million BTC, with 170,000 BTC withdrawn in the past month, indicating movement to long-term storage. This combination of robust ETF demand and shrinking supply continues to support price appreciation. Historical patterns suggest political uncertainty may benefit hard assets. During the 2013 U.S. shutdown, Bitcoin nearly doubled while gold gained over 3%. The current market appears to be following this precedent rather than the 2018-19 pattern where BTC declined. With the dollar softening and bond markets anticipating a more cautious Federal Reserve, traders expect easier liquidity conditions could fuel further upside in the crypto market.