Potential Bitcoin Crash Seen As Major Risk For 2025 Stock Market Decline

According to Odaily, Thomas Peterffy, founder and chairman of Interactive Brokers, often referred to as the 'Father of High-Frequency Trading,' has expressed concerns about a potential Bitcoin crash being one of the significant risks that could lead to a stock market decline in 2025. In a recent interview with Bloomberg, Peterffy elaborated on his worries regarding the possible downturn of the U.S. stock market in 2025. He highlighted the high leverage levels within the financial system as a primary concern. Peterffy stated, 'The risk of an economic downturn is very high because margin balances are growing very, very fast, and I am very worried that people have overextended their financial capabilities.' One area where margin risk has significantly increased is Bitcoin, partly due to the low fees charged by the Chicago Mercantile Exchange (CME) for Bitcoin futures. Data from YCharts indicates that margin debt, as reported by the Financial Industry Regulatory Authority (FINRA), reached approximately $815 billion in October, marking the highest level since February 2022. Meanwhile, MicroStrategy has recently raised billions of dollars through debt to increase its Bitcoin reserves. If Bitcoin were to experience a sudden and sharp decline, investors might be forced to sell assets to meet margin calls, thereby exerting additional pressure on prices.