Cryptocurrency

This surge in value has prompted discussions among investors and analysts about the possibility of a Bitcoin bubble. Brett Friedman, Winhall Risk Analytics/OptionMetrics contributor, examines 5 factors to consider.The characteristics of a financial bubble are often only clear in hindsight, but certain indicators can suggest an overheated market, Friedman suggests.For instance, a growing spread between implied volatility and out-of-the-money to at-the-money volatility skew in options trading may signal an overbought market. While this spread in Bitcoin has been increasing, it has not reached “abnormal levels.”Futures curves can also provide insights into market dynamics. A backwardated curve, where near-term contracts are priced higher than longer-term ones, or a flattened contango curve, can indicate bubble-like behavior.However, Bitcoin, which has been in contango since the introduction of futures in late 2017, has seen its deferred months outperforming nearby contracts recently. This trend suggests trader confidence in the sustainability of the rally well into 2025, which would not align with typical short-lived bubble patterns.Another sign of market frothiness in the cryptocurrency market is a surge in volume and open interest, according to Friedman.Since the election, Bitcoin futures have seen increased activity, particularly in the Micro BTC contract favored by retail investors. The Micro BTC contract’s open interest has jumped by almost 2.5 times since before the election, while the full-sized contract’s interest has remained stable. “This could indicate that traders are comfortable with the risk of the deferred contracts and believe that the current rally will be sustained and last into 2025,” he said.”This would not be the case if BTC were forming a bubble, since they are usually short-lived and confined to the front end of the curve.”Another factor that prompted Friedman to examine if Bitcoin is really in a bubble is the emergence of related financial products with high leverage and promises of rapid returns. Products like the MicroStrategy stock, leveraged Bitcoin-related ETFs, and the proliferation of crypto evangelists on social media could be indicative of speculative behavior.So, what’s his conclusion? While there are signs of an enthusiastic market for Bitcoin futures, it is not yet clear if this constitutes a bubble. “There is evidence that the market may indeed be frothy, but not necessarily on the way to a full-fledged bubble yet.”In the short run, it appears that BTC will need some new bullish fundamentals or will have to get back over $100K to reignite speculation that a bubble might be forming,” he concluded. More

At $98,000, option holders experienced the maximum pain point, or the price at which they suffered the greatest losses. This is quite consistent with the recent price consolidation of Bitcoin around the psychological level of $100,000. The price chart indicates that bullish momentum is still present because Bitcoin is still trading above important support levels, such as the 50 EMA. But the trading volume seems to have tapered off a little, probably because the holidays traditionally bring lower market activity in the U.S. and Europe. Although there may be another test of support around $95,000, a breakout above $102,000 might rekindle optimism. A total of 164,000 options contracts for Ethereum with a Put/Call Ratio of 0.68 and a maximum pain point of $3,700 expired.The price chart for Ethereum shows a consistent recovery from the 26 EMA, indicating that buyers are entering at pivotal points. The fact that ETH has recovered from recent declines despite the expiration indicates rising demand. The holiday season’s reduced trading activity, however, may limit price movements to the $3,500-$3,900 range for the time being. Markets have historically seen brief volatility following options expirations, as traders liquidate or modify their positions.A combination of consolidation and irregular price movements may result from this dynamic and lower trading volumes over the holiday season. Although the expired maximum pain points — $98,000 for Bitcoin and $3,700 for Ethereum — serve as important reference levels, the decreased trading activity may postpone any significant trend changes. Traders should keep an eye out for any departure from these levels since it may reveal information about the direction of the market in 2025.This article was originally published on U.Today More

The world’s biggest cryptocurrency rose sharply on Thursday after President-elect Donald Trump reiterated his pledge to make the U.S. a global crypto leader. But this bounce was short-lived, given that he did not provide any major cues on policy.Bitcoin fell 0.7% to $99,961.4 by 00:30 ET (05:30 GMT). Focus was now squarely on the Fed’s rate decision next week, where the central bank is widely expected to cut interest rates by 25 basis points.But markets turned uncertain over the Fed’s long-term outlook on rates, especially as producer inflation data for November read higher than expected, while consumer inflation remained sticky. The dollar firmed on this notion, pressuring risk-driven assets across the board. Traders were now awaiting the Fed’s outlook on rates, and are bracing for a slower pace of easing in 2025. High rates limit the appeal of speculative assets such as crypto. Recent crypto market data showed spot exchange-traded funds tracking Bitcoin and Ether saw sustained inflows through early December, amid sustained optimism over friendlier regulations under Trump. Bitcoin ETFs saw an eleventh consecutive day of inflows as of December 12, with Blackrock’s iShares Bitcoin Trust (NASDAQ:IBIT) commanding the biggest share of inflows. Spot Ether ETFs marked 14 straight days of inflows, with Blackrock (NYSE:BLK) and Grayscale ETFs seeing the most inflows. ETF inflows signal increased institutional interest in crypto, given that they offer investors a safer way to gain crypto exposure. The launch of spot ETFs in U.S. markets earlier this year was viewed as largely positive for crypto, with inflows picking up rapidly after Trump’s election victory in early-November. Most major altcoins rescinded some of their gains made this week in tandem with Bitcoin. But they had also largely outpaced Bitcoin in recent weeks, as markets bet that friendly U.S. regulations will allow cryptos beyond Bitcoin to flourish. Ether fell 0.3% to $3,916.31, while XRP fell 3.6% to $2.3458.Solana, Cardano and Polygon fell between 2% and 7%, while among meme tokens, Dogecoin fell 2.7%. More

After emerging from a protracted period of consolidation earlier this year, Bitcoin has shown resilience by continuing on its upward trajectory, as seen by the price chart. Key moving averages, especially the 50 EMA, which still serves as dynamic support, are being held above by the price. Additionally, the EMA’s gradual slope indicates a sound trend and lays the groundwork for future gains should bullish sentiment hold. But volume analysis advises prudence. The volume of recent trading sessions has tapered off, suggesting that the buying momentum that propelled Bitcoin to this level may be waning. In the absence of a robust surge in fresh purchasing activity, the price might find it difficult to sustain this rate, potentially leading to a retracement. The fact that the RSI is in the overbought zone raises additional concerns. In the past, Bitcoin has exhibited a propensity to retreat once it reaches overbought conditions, frequently withdrawing to find support at lower levels. A return to the $95,000-$96,000 range would still be in line with a sound upward trend and might act as a reset prior to another upward push. Conversely, Bitcoin’s long-term foundations are still strong, and the story of the digital gold keeps gaining traction. Long-term upward momentum may be supported by institutional interest, growing adoption and macroeconomic variables like inflation worries.An important element of Dogecoin’s most recent rally was the ascending channel, which provided a distinct path for expansion and investor confidence. It gets more complicated, though, by the drop beneath this formation. Once an asset leaves such a channel, it usually takes a lot of buying pressure and market interest to reenter it, and DOGE does not seem to have either of these right now. Volume indicators make matters worse. The breakdown is accompanied by a discernible drop in trading volume, indicating waning investor zeal. This lack of belief may make any attempts at recovery more difficult right away and expose Dogecoin to more declines. The asset’s standing in relation to important moving averages is another cause for concern.Dogecoin is currently perilously near its 50 EMA, which has historically served as a dynamic support line. A deeper correction may be possible if DOGE is unable to maintain above this level, possibly returning to the $0.32 level or even dropping lower toward the $0.26 range. The general state of the market also increases the level of uncertainty. Dogecoin’s road to recovery appears to be paved with obstacles, as numerous cryptocurrencies are exhibiting increased volatility and a dearth of obvious bullish catalysts. The ability of ADA to stay above this level indicates persistent bullish momentum, which is frequently a crucial indicator of trend direction. The graph shows that ADA has risen significantly in recent weeks, surpassing the psychological threshold of $1.00. Investor confidence has increased as a result of this milestone, moving into a critical support area. A possible breakout depends on the asset’s ability to sustain trading volumes during this consolidation phase, which suggests ongoing market interest. The fact that ADA is currently in line with its moving averages is among the most important developments. The price is still well above the 50 EMA, which reinforces the upward trend. In the near future, ADA may aim for higher levels if it can maintain its current range of consolidation while drawing more buying pressure. Broadly speaking, Cardano’s technical performance is in line with its fundamentals as well. The foundation for a strong market phase is being laid by the ecosystem’s steady growth and expanding adoption. With the $1.30-$1.35 range acting as a crucial area of resistance, ADA may move toward the $1.20 level if market sentiment continues to be positive. But problems still exist. The market environment as a whole is still unstable, and investor sentiment and general market trends will determine whether ADA can maintain its momentum. Cardano appears to be in a strong position to build on its recent successes for the time being, which could pave the way for a strong showing in the weeks to come.This article was originally published on U.Today More

The bill outlines the definitions relevant to the reserve, including “Bitcoin,” “cold storage,” “cryptocurrency,” and “custody.” It emphasizes the decentralized nature of Bitcoin and its potential as a hedge against inflation, aligning with Texas’s commitment to fostering innovation in digital assets.The Texas Strategic Bitcoin Reserve would be managed by the state comptroller, who would be responsible for the secure storage, management, and reporting of the Bitcoin assets. The comptroller would also have the authority to accept Bitcoin donations from Texas residents or governmental entities, with the aim of promoting shared ownership and community investment in the state’s financial future.The bill stipulates that all Bitcoin held in the reserve must be stored for a minimum of five years before it can be transferred, sold, or converted. To ensure security and transparency, the comptroller is tasked with developing policies and protocols for the reserve’s management, including regular audits and biennial reports to be published online.The reports will detail the total amount of Bitcoin held, its equivalent value in dollars, account growth, transactions, security threats, and the amount eligible for conversion after the five-year holding period.Additionally, the comptroller may issue certificates of acknowledgment to donors and establish a recognition program to honor significant contributions. The comptroller also has discretion over donor eligibility and the ability to return Bitcoin to ineligible donors.The bill includes provisions for the acceptance of certain cryptocurrencies for the payment of state fees and taxes, with the requirement that these be converted to Bitcoin before being deposited into the reserve. The comptroller is also empowered to establish rules for compensating departments or agencies for the Bitcoin received.If passed, the Texas Strategic Bitcoin Reserve Act would take immediate effect if it secures a two-thirds majority vote in both houses. Otherwise, the Act is set to take effect on September 1, 2025, and will expire on September 1, 2035.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

Schiff says the latest inflation figures show that the central bank’s interest rate measures are not doing enough to curb inflation. While he sees it as a worrying sign, the fact that Jerome Powell, current Fed head, called Bitcoin a digital alternative to gold did not encourage Peter Schiff.For him, Bitcoin is neither money nor an adequate substitute for gold. The prospect of the cryptocurrency integrating with state mechanisms raises further concerns, suggesting the potential for economic disruptions, per the expert’s reflections on adding Bitcoin to strategy reserve calls.However, a different narrative is emerging from BlackRock (NYSE:BLK), the world’s largest asset manager. Bitcoin has not just entered the conversation but, in the view of one of the world’s largest hedge funds, has matured enough to claim a strategic spot in traditional portfolios.Low correlation with traditional markets is a key point in BlackRock’s argument. While Schiff critiques Bitcoin for its lack of intrinsic value, BlackRock sees it as a hedge against systemic risks, such as geopolitical tensions and fragmented financial systems. Even with its swings, Bitcoin’s calculated inclusion, the report notes, mirrors the risk levels of tech giants dominating portfolios today. By embracing cryptocurrency, BlackRock signals a growing institutional shift that defies traditional skepticism.This article was originally published on U.Today More

Satoshi Nakamoto’s final post on the Bitcoin forum on Dec. 12, 2010, and subsequent disappearance on Dec. 13 of the same year marked a defining moment in Bitcoin’s history. Satoshi’s departure shifted the responsibility of Bitcoin’s development and governance to its decentralized community.Fourteen years later, Bitcoin remains a testament to the power of decentralized technology, thriving without its creator’s direct involvement. The leading cryptocurrency has evolved into a multi-trillion-dollar asset class, inspiring the creation of thousands of cryptocurrencies and blockchain-based apps.To this day, Satoshi Nakamoto’s true identity remains unknown. Speculation has ranged from a single individual to a group of developers, but no conclusive evidence has emerged.According to Glassnode, the Bitcoin network has grown by leaps and bounds since the Genesis Block, achieving a market capitalization of $2 trillion, flipping silver in value and settling $131 trillion in volume via 1.12 billion transactions.Throughout this era of exceptional market boom, investors have realized a total of $1.27 trillion in profit and -$592 billion in losses on-chain, resulting in a cumulative net capital inflow of $750 billion, highlighting the tremendous value that has flowed into the Bitcoin network over its lifetime.On Dec. 5, notable aggregate balances included 1.8 million BTC (9.1% of the supply) held on exchanges and 1.1 million BTC (5.6% of the supply) managed by U.S.-based ETFs, indicating exceptional growth since their launch on Jan. 11, 2024. Furthermore, miners (excluding Patoshi) possessed 700,000 BTC (3.5% of the supply), whereas the U.S. Treasury had 187,000 BTC (0.9% of the supply), demonstrating the vast spread of ownership across various entities.This article was originally published on U.Today More

This article was originally published on U.Today More