The father of high-frequency trading: Potential Bitcoin crash may lead to the collapse of US stocks next year

Thomas Peterffy, founder and chairman of Interactive Brokers and the "father of high-frequency trading," believes that a potential Bitcoin crash is one of the biggest risks that could lead to a stock market decline in 2025. In an interview with Bloomberg last week, Peterffy explained why he is worried that U.S. stocks could fall in 2025. The problem Petterffy sees is the high level of leverage throughout the system. "The risk of a downturn is very large because margin balances are growing very, very quickly, and I am very worried that people are overextending their financial capabilities," he said. One area where margin risk has increased significantly is Bitcoin, thanks to the low fees charged by the Chicago Mercantile Exchange (CME) for Bitcoin futures. According to YCharts data, the Financial Industry Regulatory Authority (FINRA) margin debt reached its highest level since February 2022 in October, at about $815 billion. Meanwhile, MicroStrategy recently raised billions of dollars in debt to increase its Bitcoin reserves. If Bitcoin suddenly falls sharply, investors may be forced to sell assets to deal with margin calls, putting more pressure on prices. (Businessinsider)