Crypto bubble? No, it’s the financial system trying to catch up

THE current consensus from recent sources is that the cryptocurrency market displays many signs of a bubble, characterised by rapid price increases driven largely by speculation, hype, and institutional involvement, with unstable fundamentals underlying these valuations.

The term “crypto bubble” refers to when cryptocurrency prices, such as Bitcoin and Ethereum, soar far beyond their real intrinsic value, often fueled by speculation, media hype, and the fear of missing out among investors. Key indicators include extreme price volatility, sudden spikes in trading volume, a new flood of crypto projects without clear value, and a market sentiment dominated by greed.

Bitcoin recently surged to record highs of over $120 000–$160 000, driven by institutional adoption of crypto ETFs, corporate treasury investments, and political support, particularly from the US administration. However, experts warn that despite some technological and adoption progress, much of this rise has speculative characteristics resembling past bubbles. Some caution that large institutional investors may be propping up prices artificially, potentially setting the stage for a sharp correction.

To get more insight on this, the Sunday Independent spoke to Sebaga Manyeula, the chief executive of a leading Crypto Firm as well as a derivatives and fintech expert. Manyeula is also a recognised key opinion leader in Africa’s fintech and digital assets space and an FSCA-approved key individual. She brings together deep regulatory insight, strategic foresight, and operational leadership.

Sunday Independent (SI): What key indicators currently suggest that the cryptocurrency market is in a bubble or trending towards one in 2025?

Sebaga Manyeula (SM): From my perspective, the market does not exhibit classic bubble behaviour. Unlike in 2017 or 2021, the recent upward movement has been gradual and supported by fundamentals such as institutional adoption, ETF approvals, sovereign accumulation of Bitcoin, and increased real-world use cases like tokenisation and payments. Rather than unsustainable spikes followed by sharp collapses, the trend has shown resilience and more measured growth.

SI: How do speculative investments and retail investor behaviour contribute to the formation of a crypto bubble today?

SM: Speculation still exists, but it is not the dominant force in 2025. The market is increasingly shaped by institutional participation and long-term adoption rather than short-term retail FOMO. Retail behaviour is also more informed today, with greater access to regulated platforms, investor education, and diversified products like ETFs. This marks a shift from purely speculative trading towards structured investment.

SI: Can the recent rapid price increases in Bitcoin and various altcoins be justified by fundamentals such as adoption and real-world usage, or are they signs of speculation?

SM: Yes, they can be justified. Bitcoin’s price appreciation reflects institutional reserves, corporate treasury strategies, and sovereign-level support. Altcoins with real-world utility — particularly those enabling DeFi, tokenisation, and infrastructure solutions — are also growing for fundamental reasons. The rise is therefore more aligned with adoption and technological advancement than with irrational speculation.

SI: How does the role of celebrity endorsements and social media hype impact the market dynamics in creating bubble conditions?

SM: Celebrity and social media influence have less weight than in past cycles. The current rally is driven by regulatory clarity, institutional inflows, and macroeconomic positioning, not celebrity endorsements. While hype can amplify short-term moves in smaller tokens, the broader market is no longer reliant on hype — it is maturing into an asset class supported by economic and institutional logic.

SI: What role does market volatility play in identifying a bubble, and how has Bitcoin’s volatility behaved this year?

SM: Bitcoin’s volatility has declined relative to prior years, reflecting growing maturity. Compared to the sharp boom-and-bust swings of past cycles, 2025 has seen more stable upward momentum. This stability suggests we are not in bubble conditions, but rather in a transition towards crypto becoming a legitimate hedge and alternative investment class.

SI: To what extent are institutional investors influencing the current crypto market, and could their involvement delay or accelerate a bubble burst?

SM: Institutional investors are the anchor of this cycle. Their entry through ETFs, custody solutions, and regulatory frameworks has stabilised demand. Far from fueling an artificial bubble, their presence reduces fragility, extends time horizons, and integrates crypto into the mainstream financial system. Instead of accelerating collapse, institutional adoption strengthens sustainability.

SI: How do current regulatory developments across major economies affect the likelihood of a crypto bubble bursting or stabilising?

SM: Regulation is a stabilising force. The US GENIUS Act for stablecoins, Europe’s MiCAR framework, and similar initiatives worldwide provide clarity and investor protection. These developments reduce systemic risk and support long-term growth. Far from setting the stage for a bubble burst, regulation underpins the institutionalisation and legitimacy of crypto.

SI: Are there significant differences between the behaviours of the Bitcoin market cycle phases (accumulation, growth, bubble, crash) and the broader altcoin market in 2025?

SM: Yes, but they are evolving. Bitcoin has matured into a macro asset, exhibiting steady accumulation and growth phases rather than speculative bubbles. Altcoins remain more volatile, but the leading projects (Ethereum, infrastructure chains, tokenisation platforms) show adoption-driven growth. The gap between “bubble-like altcoins” and “mature blue-chip tokens” is widening—another sign of market evolution.

SI: What are the potential risks and consequences for retail investors if the cryptocurrency market bubble bursts in the near future?

SM: If one accepts my position — that crypto is not in a bubble — then risks are not from an imminent collapse but from normal investment volatility. Retail investors may face pullbacks, but with proper regulation, safer investment vehicles, and increasing use cases, risks are more akin to those in other asset classes. The key is education and diversification, not fear of a bubble burst.

SI: How might emerging technologies such as quantum computing pose risks or alter the security and valuation of cryptocurrencies in this context?

SM: Quantum computing is a long-term concern, but it does not present an immediate threat. The crypto industry is already exploring quantum-resistant protocols. In fact, preparing for quantum resilience strengthens the sector’s credibility and demonstrates its adaptability. This proactive approach reinforces why crypto is evolving as a long-term asset class rather than a speculative bubble.

SI: Do you believe the present market conditions signify a temporary speculative bubble or a longer-term evolution of crypto as a stable asset class?

SM: Absolutely and clearly a long-term evolution. The combination of institutional adoption, regulatory progress, sovereign recognition, and technological utility demonstrates that crypto has matured beyond bubble conditions. It is positioning itself as a core alternative investment, a hedge against economic volatility, and a foundational layer for future financial infrastructure.

Manyeula ended the interview, stating that her absolute position was that the crypto market in 2025 does not resemble the bubble dynamics of the past. “Instead, it reflects measured growth, institutional legitimacy, and macroeconomic relevance. While volatility and speculation remain part of the landscape, they are no longer the defining features.”

She said the trajectory was towards sustained integration into the global financial system.

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