Catenaa, Tuesday, December 17, 2024 – Interactive Brokers Chair Thomas Peterffy has cautioned investors against heavy Bitcoin exposure, recommending a portfolio allocation of 2% to 3% but advising against exceeding 10%.
The seasoned financial executive expressed concerns about the cryptocurrency’s volatility and speculative nature.
In a Bloomberg podcast, Peterffy called cryptocurrencies “a figment of imagination” with no intrinsic value, likening them to fiat currencies. Despite his skepticism, he acknowledged Bitcoin’s role in diversifying investments, provided allocations remain modest.
Bitcoin has been trading above $100,000, buoyed by hopes of a more lenient regulatory environment under President Donald Trump’s administration.
The cryptocurrency has risen nearly 15% in the past month, driven by strong institutional inflows and optimism over its future.
However, Peterffy warned that growing leverage could destabilize markets if a sharp price correction occurs, potentially leading to bankruptcies and stressing financial clearinghouses.
Interactive Brokers has been involved in cryptocurrency trading since 2017, offering Bitcoin futures and later expanding into direct crypto trading in 2021 through a partnership with Paxos Trust Company.
The firm enables trading in Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.
Peterffy’s remarks align with those of investor Bill Miller, who predicts that financial advisors will soon recommend Bitcoin allocations of 1% to 3%. Miller highlighted Bitcoin’s resilience and unique economic features, positioning it as an asset that functions independently of central bank interventions.
As Bitcoin’s rally continues, experts remain divided over its long-term trajectory, balancing optimism over its adoption with caution about potential market instability.
