() price has rallied sharply in recent weeks with the December future contract hitting a peak of $105,325 on December 5, and the June 2025 contract reaching $110,935 on the same day.
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.
Is A Bitcoin Bubble Forming?
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…
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