The administration of Donald Trump as the 47th President of the United States has marked a significant shift in the cryptocurrency landscape.
Since his election, Bitcoin [BTC] has reached a historic milestone, surpassing the $100,000 threshold and trading at $103,000, indicating a thriving phase for the digital currency.
This exceptional performance has spurred various countries, organizations, and individuals to enhance their involvement with BTC.
Advice from Peterffy on Bitcoin Holdings
Against this backdrop of revitalized interest, Thomas Peterffy, the founder of Interactive Brokers, has expressed his viewpoint, suggesting that people should possess “some Bitcoin” while also warning against extensive exposure to the primary cryptocurrency.
In his words,
“Hence, I believe that anyone without Bitcoin should acquire some, but in moderation.”
Furthermore, Peterffy – the billionaire creator of Interactive Brokers, has advocated for a cautious approach to Bitcoin investments.
He proposed that individuals consider allocating 2% to 3% of their total worth to the digital asset.
Nevertheless, he also advised against allocating more than 10% of one’s assets to BTC, deeming such a level of exposure as “excessively risky.”
It is essential to acknowledge that, while sharing his broader perspective on the crypto domain, Peterffy stressed,
“To be transparent, I am somewhat apprehensive about cryptocurrencies because, fundamentally, they can attain any value as they are essentially just a product of one’s imagination. Hence, they lack any intrinsic value.”
Key Concerns Highlighted by Peterffy
For those not well-informed, Peterffy also raised worries regarding the rapid surge in margin balances, especially concerning unstable assets like Bitcoin.
He cautioned that the minimal margin prerequisites for BTC futures trading on platforms like the CME might induce excessive leverage among traders.
Peterffy alerted that a sudden and drastic drop in Bitcoin’s value, ranging from 30% to 50% in a single day, could lead to widespread bankruptcies.
This kind of scenario could overwhelm clearinghouses, possibly necessitating the transfer of bad debts to clearing members, thus disrupting the financial ecosystem.
Consequently, although Peterffy acknowledged the slim likelihood of such an occurrence, he implored,
“I urge everyone to pay attention to these circumstances and take precautionary measures, refraining from extending margins too liberally.”
Meanwhile, at the time of writing, Bitcoin was exchanging at $100,571.92, showing a 2.97% rise in the past 24 hours, while indicators like RSI and CMF hint that the bullish trend still has momentum.