Interactive Brokers‘ founder Tom Peterffy said on CNBC’s “Fast Money” on Thursday, his concern is that the cryptocurrency could continue to rise to $100,000 or more before crashing to zero, and could pull down small brokerages in the process.
Bitcoin‘s price has skyrocketed just this week from $12,000 to $19,000 and back down below $16,000. Futures trading is only seen as further legitimizing bitcoin even as some prominent market participants say a dangerous bubble is forming.
“Smaller brokerage firms will go bankrupt,” Peterffy warned on Thursday, adding it could “destabilize the clearing houses.”
Peterffy has sounded alarms before about the dangers of bitcoin, but his firm is allowing traders access to the futures products as of Monday, at a 50 percent margin requirement. Traders will be able to take long positions only, at $5 a contract, and won’t be able to take a short position, or a bet on a decline. The steep price per contract —normally the broker charges 25 cents to 80 cents a contract — is to pay Interactive for the risk, Peterffy said.
“I’m extremely curious, this is an amazing thing,” Peterffy told CNBC, adding that he doesn’t own any bitcoin. “How silly people are, it is just amazing.”
Firms involved in the futures industry have said they are concerned about the swift roll out of the bitcoin futures product. The Futures Industry Association sent a letter to the Commodity Futures Trading Commission on Wednesday raising concerns about the volatility of digital currencies and the risks clearing firms will be shouldering once futures trading begins.
Source: Investment Cnbc
Bitcoin could rise to 0,000 or more before crashing to zero, says Interactive's Peterffy