The founder of Interactive Brokers, Thomas Peterffy, has recommended that investors allocate 2% to 3% of their net worth to Bitcoin. However, he emphasized the importance of limiting exposure to the cryptocurrency, citing its volatility. Under Peterffy’s leadership, Interactive Brokers restricts client Bitcoin investments to a maximum of 10% of total assets.
In a Bloomberg Television interview, Peterffy said that Bitcoin has a role in diversified portfolios but should not dominate them. He expressed concern over its price fluctuations and lack of intrinsic value, comparing Bitcoin to fiat currencies that hold value only through perception.
He said:
I would recommend that people put maybe 2% to 3% of their net worth into Bitcoin. We for example, will not allow anyone to invest more than 10% of their assets into Bitcoin because I think that would be very dangerous.
Peterffy’s changing perspective on Bitcoin and cryptocurrency
Peterffy’s views on Bitcoin have evolved. Initially critical, he once warned that BTC could harm the broader economy, even expressing skepticism about its viability as a currency. Peterffy’s concerns grew after reports of CME launching BTC futures.
However, by 2021, he disclosed that he had invested a small part of his assets in cryptocurrency, recognizing its potential as protection against the declining value of fiat currencies.
Moreover, Interactive Brokers entered the crypto market in 2021, allowing users to trade BTC, Ethereum, Litecoin, and Bitcoin Cash through its platform. The brokerage partnered with Paxos Trust to deliver secure and efficient cryptocurrency trading services. Peterffy says Interactive Brokers provides a more efficient platform for crypto trading than Robinhood.
Despite his investment, Peterffy remains uncertain about Bitcoin’s future. He speculates that its price could collapse to zero or soar to a million dollars. Highlighting Bitcoin’s unpredictable nature, he still advises limited investments, seeing it as protection against the possible decline of traditional currencies.
Peterffy still believes in the market’s growth and has noted the favourable conditions of deregulation for private entities. Nevertheless, he also noted potential problems of extended markets during periods of high growth rates. He is balanced by saying that Bitcoin can be a great investment but should be invested cautiously and only in a small portion of the portfolio.
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