Bitcoin is trading at all-time highs, surging beyond £93,000 for the first time.
The world’s biggest cryptocurrency has doubled in value over the past 12 months – buoyed by Donald Trump’s return to the White House.
However, its 10% surge over the past week is down to one specific factor: the US government shutdown.
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Experts have told Sky News that the drama unfolding in Washington is undermining trust in the dollar – and pushing investors to alternatives.
Bitwise senior associate Max Shannon said stubbornly high inflation, which erodes spending power, is another factor.
Some countries are also increasing their monetary supply – watering down the value of cash in circulation – with government borrowing on the rise.
That’s led to what’s known as a “debasement trade”, where investors pile their cash into so-called “hard” assets like Bitcoin and gold instead.
Bitcoin has a fixed supply, meaning no more than 21 million will ever exist. Almost 95% of them are already in circulation, with a small number of coins entering the market every day.
Enthusiasts argue this creates a form of scarcity that pushes prices up, as demand for BTC is considerably higher than supply.
The latest figures from the Financial Conduct Authority suggest about seven million people in the UK have invested in cryptocurrencies. A single coin can be broken up into 100 million pieces, meaning many have a tiny chunk of Bitcoin in their portfolios.
But much of the current enthusiasm for Bitcoin isn’t coming from everyday investors – instead, it’s institutions leading the charge.
Deep-pocketed companies and individuals are buying into exchange-traded funds (ETFs) on Wall Street that track Bitcoin’s value – allowing them to gain indirect exposure to BTC’s price rises without owning it directly. A staggering $3.5bn (£2.6bn) flowed into these products last week.
Samson Mow is the chief executive of JAN3, a company that promotes Bitcoin adoption. He played a role in El Salvador becoming the first country in the world to adopt this cryptocurrency as legal tender.
While that experiment didn’t achieve widespread success, the Central American nation continues to invest in BTC – with estimated profits of more than £350m as a result.
When asked why Bitcoin has hit all-time highs, Mow told Sky News: “Bitcoin has been a ball pushed underwater for months – this move up was inevitable. Raw demand has simply caught up with the incredibly limited supply.”
He pointed to how 6.7% of Bitcoin’s supply is now tied up in ETFs – with Strategy, a company that has the goal of accruing as much BTC as possible, owning a further 3%. This means there’s less to go around overall, in what Mow describes as “the beginning of a massive supply shock”.
The entrepreneur believes a single Bitcoin will one day be worth $500,000 (£371,000), meaning the cryptocurrency’s total market capitalisation would surge to $10trn (£7.4trn). That’s more than double what Nvidia’s currently worth as the world’s most valuable company, and would make BTC the second-largest asset after gold.
Mow shrugged off any suggestion Bitcoin’s dramatic price rises aren’t sustainable – and insists the only thing that’s “definitely not sustainable” is BTC’s value remaining as low as it is.
“There are only 21 million BTC. Most corporations, billionaires, and even millionaires still have no exposure to Bitcoin. Nation-states have yet to seriously begin accumulation too, but many that we’re engaged with are very interested and are looking to move quickly,” he said.
Of course, not everyone shares his enthusiasm. Critics argue Bitcoin lacks intrinsic value, with some claiming it’s “worse than a Ponzi scheme”.
David Gerard, a journalist who’s deeply sceptical of the crypto industry, told Sky News that Bitcoin suffers from thin trading volumes – resulting in “unfeasibly volatile prices” and an “easily manipulated market”.
“Bitcoin trading is overwhelmingly in unregulated offshore exchanges, so Bitcoin is not a well-functioning market in the sense of, say, stocks,” he said. “If investors treat Bitcoin as a well-regulated market, they will get burned. ETFs are regulated instruments, the way Bitcoin’s price is set is not.”
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Gerard has railed against BTC for years, and wrote a book condemning the sector in July 2017. But in the eight years since it was published, Bitcoin’s price has risen by more than 5,200%. Has this changed his views?
“Everything that’s structurally wrong with Bitcoin is still wrong with Bitcoin,” he said. “Anyone who sees the big number and thinks ‘time to get in’ is the sucker the big boys are making their money from.
“You can definitely make money in Bitcoin! But statistically, you’re much more likely to be the sucker.”
Some banks, including Morgan Stanley, now encourage their clients to allocate 2% to 4% of their portfolios into crypto – but doing so when prices are so high is risky.
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While it’s possible Bitcoin could keep on rising, this is an asset also known for punishing pullbacks that have seen investors, including people right here in the UK, lose a lot of money.
This tends to happen every four years. BTC surged to a record price of $20,000 in December 2017, but plunged by more than 80% a year later – falling below $4,000.
Another all-time high of $69,000 then followed in November 2021 – but 12 months on, a spectacular crash dragged it back down to $17,000, a 75% drop.
Four years on in October 2025, here we are again: BTC has never been higher. History doesn’t always repeat itself – but if past performance is a guide, 2026 could prove challenging.
