The Crypto Market Faces Volatility: Between Euphoria and Ethical Prudence
Introduction
The cryptocurrency market has once again demonstrated its unpredictable nature with a massive injection of $156 billion in just seven hours, pushing Bitcoin above the psychological threshold of $100,000 [1]. This spectacular rebound, which occurred on November 7, 2025, rekindled investor enthusiasm after a period of significant uncertainty. For the Muslim investor, this extreme volatility raises fundamental questions about the nature of these assets and the compliance of such investments with the principles of Islamic finance. This article aims to analyze this recent market surge from an ethical perspective, examining the concepts of Gharar (excessive uncertainty), Maysir (speculation/gambling), and Riba (interest/usury), in order to provide interpretative keys for informed decision-making.
Anatomy of a Spectacular Rebound
November 7, 2025, will remain etched in the annals of the crypto market. After flirting with the $100,000 support level, Bitcoin experienced a meteoric rise to surpass $103,000, dragging the entire ecosystem along with it. Ethereum, the second-largest market capitalization, approached $3,500, while other major altcoins like Solana also posted remarkable performances [1].
This bullish movement was not limited to market leaders. The total capitalization of altcoins jumped by more than $81 billion in a single day, with many cryptocurrencies recording double-digit gains. This phenomenon, often referred to as "altcoin season," reflects a renewed appetite for risk among investors who turn to more volatile assets in hopes of higher returns. This rebound was one of the most powerful intraday moves in recent weeks, sharply contrasting with the caution that had prevailed until then.
However, it is crucial to place this event in context. The market was emerging from a period of severe correction, described by some as a "crypto winter," which had seen the value of many assets plummet drastically. The crash of October 10, 2025, when Bitcoin lost nearly 15% of its value in a single day, dropping from $122,000 to $104,000, left its mark [2]. Bitcoin's implied volatility (BVIV) has remained at very high levels, above 50%, a sign of the persistent nervousness among market operators [2].
Volatility: A Structural Characteristic
Understanding the reasons for this volatility is essential for any investor. Unlike traditional financial markets, which are regulated and benefit from stabilization mechanisms such as central bank interventions, the crypto ecosystem is largely decentralized. This absence of a "lender of last resort" makes it structurally more vulnerable to liquidity shocks and panic movements [2].
Recent events have highlighted the systemic fragility of certain mechanisms specific to decentralized finance (DeFi). "Auto-deleveraging" (ADL) phenomena, where exchanges forcibly close leveraged positions to cover losses, can create cascading liquidations that amplify price movements. These mechanisms, combined with infrastructure failures on certain platforms, exacerbate volatility and can lead to "flash crashes" [2].
Faced with this reality, diversification within the crypto ecosystem itself appears to be a relevant strategy. While Bitcoin only progressed by 6% in the third quarter of 2025, certain projects related to layer-2 solutions, DeFi, or blockchain infrastructures posted much higher performances, ranging from +32% to +65% [2]. This suggests that a thorough analysis of each project's fundamentals is more necessary than ever to navigate this complex environment.
Ethical Analysis in Light of Islamic Finance
For the Muslim investor, the question is not only whether an investment is profitable, but whether it is ethical (halal). The extreme volatility recently observed directly challenges several fundamental principles of Islamic finance.
Gharar (Excessive Uncertainty)
Gharar refers to uncertainty, ambiguity, or lack of information in a contract, which can lead to a dispute. An investment whose outcome is excessively uncertain may be considered to contain Gharar. The $156 billion rebound in a few hours, followed by periods of sharp decline, perfectly illustrates this extreme uncertainty. The value of cryptocurrencies is often disconnected from any tangible economic reality and largely depends on crowd psychology and market sentiment. This speculative nature, where an asset's value can change drastically without an apparent fundamental reason, is a major source of Gharar.
However, nuance is warranted. Not all crypto assets present the same level of Gharar. Bitcoin, by its decentralized nature, predictable monetary policy, and growing adoption as a store of value, can be considered to have a lower level of Gharar than many "memecoins" or altcoins whose utility is virtually non-existent and whose value rests solely on fads.
Maysir (Speculation and Gambling)
Maysir is the acquisition of wealth through chance or speculation, without productive effort. It is often equated with gambling. The line between investment and speculation is sometimes thin, but Islamic finance encourages investment in the real economy, where value creation is tangible. When investors buy cryptocurrencies solely in hopes of reselling them at a higher price in the very short term, without caring about the underlying project, they dangerously approach Maysir. Double-digit gains in 24 hours, while attractive, should alert the ethical investor to the potentially speculative nature of their investment.
An ethical approach would consist of investing in blockchain projects that have real utility, that solve a concrete problem, and that have a viable economic model. It is about moving from a speculator's logic to an investor-partner logic, who believes in the long-term potential of a technology.
Riba (Interest and Usury)
Riba, interest or usury, is formally prohibited in Islam. While the purchase and holding of cryptocurrencies like Bitcoin generally do not pose a Riba problem, many decentralized finance (DeFi) products carry it. "Staking," "lending," or "yield farming" platforms that offer fixed or variable returns in exchange for locking up one's cryptocurrencies often resemble interest-bearing loan contracts. The Muslim investor must therefore exercise extreme vigilance and analyze in detail the functioning of each DeFi protocol before placing their funds there.
Conclusion: Towards Informed and Responsible Crypto Investment
The recent crypto market rebound is a stark reminder: this universe is both full of opportunities and considerable risks. For the Muslim investor, volatility is not only a financial risk, it is also an ethical risk. The principles of Gharar, Maysir, and Riba must guide every investment decision.
Rather than giving in to the euphoria of rapid rises or the panic of brutal falls, a measured and responsible approach is necessary. This involves continuous education, thorough project analysis, and prudent diversification. The emergence of real-world tokenized assets (RWA), which offer stable returns with low correlation to the crypto market [2], could also constitute an interesting alternative for investors seeking stability and ethical compliance.
Ultimately, investing in cryptocurrencies ethically is possible, but it requires rigorous discipline and a willingness to prioritize long-term value creation over short-term speculation. The path is narrow, but it is the sine qua non condition for decentralized finance to one day fulfill its promises of a fairer and more inclusive financial system.
References
[1] Julien Leroy, "The crypto market jumps $156 billion in 7 hours," Yahoo Finance France, November 9, 2025. https://fr.finance.yahoo.com/actualites/march%C3%A9-crypto-bondit-156-milliards-200000262.html
[2] Riley Serkin, "Bitcoin's Volatility and Market Sentiment: Navigating Risk in a Bearish Landscape," AInvest.com, November 7, 2025. https://www.ainvest.com/news/bitcoin-volatility-market-sentiment-navigating-risk-bearish-landscape-2511/