The voices of skepticism are growing louder.
Father of High-Frequency Trading: Potential Bitcoin Crash Could Bring Down U.S. Stocks Next Year
Thomas Peterffy, founder and chairman of Interactive Brokers, known as the "father of high-frequency trading," believes that a potential Bitcoin crash is one of the biggest risks that could lead to a decline in the stock market in 2025.
In an interview with Bloomberg last week, Peterffy explained why he is concerned about a possible decline in U.S. stocks in 2025. The issue Peterffy sees is the high leverage levels throughout the system. He stated, "The risk of an economic downturn is very high because margin balances are growing very, very quickly, and I am very concerned that people are overextending their financial capacities," with one area where margin risk has significantly increased being Bitcoin, thanks to the low fees charged for Bitcoin futures by the Chicago Mercantile Exchange (CME).
According to data from YCharts, margin debt reported by the Financial Industry Regulatory Authority (FINRA) reached its highest level since February 2022 in October, amounting to approximately $815 billion. Meanwhile, MicroStrategy recently raised billions of dollars through debt to increase its Bitcoin reserves. If Bitcoin suddenly plummets, investors may be forced to sell assets to meet margin calls, thereby putting further pressure on prices. $ETH