Thomas Peterffy says he owns some cryptocurrency because ‘you have to play the odds’
Online brokerage pioneer Thomas Peterffy told CNBC on Wednesday he’s invested in cryptocurrencies, while still expressing skepticism over the long-term future of the digital asset class.
“Even I myself have put a little bit of money into crypto, because even though chances are, I think, that this is not going to be a viable market, I think that there’s a small chance that this will be a dominant currency, so you have to play the odds,” the billionaire founder and chairman of Interactive Brokers said on “Closing Bell.” He did not specify which cryptocurrency or cryptocurrencies he owns.
The remarks come as Interactive Brokers prepares to launch cryptocurrency trading by the end of summer, a move seen as noteworthy due to the e-broker’s reputation for serving more sophisticated clients.
Peterffy has previously been skeptical of bitcoin, the world’s largest cryptocurrency by market value, at previous points, particularly in 2017 as the CME prepared to launch bitcoin futures.
At that time, Peterffy told CNBC he had no problem with people who wanted to trade bitcoin and other cryptocurrencies, but he warned of “linking bitcoin and other cryptocurrencies by federal regulations to the real economy.”
Regarding Interactive Brokers' upcoming launch of crypto trading, Peterffy said “several of our clients expressed an interest” in being able to invest in the digital assets. “And I completely understand it,” he said.
Many in the crypto community see bitcoin as a long-term store of value and express optimism about its ability, along with blockchain-based digital assets, to disrupt the traditional financial system. Jack Dorsey, the billionaire CEO of Twitter and fintech firm Square, said earlier Wednesday he hopes bitcoin “helps create world peace.”
Bitcoin was up nearly 7% Wednesday afternoon, trading around $31,800 per token. The historically volatile cryptocurrency traded as high as $32,765 on the day, according to Coin Metrics. The move higher came one day after bitcoin fell below $30,000 for the first time since June 22.
Bitcoin remains down about 50% from its all-time high near $65,000 in mid-April, around the time of cryptocurrency exchange Coinbase’s public markets debut.
Further adoption of bitcoin by high-profile investors and institutions was seen as one reason for bitcoin’s massive rally that began last year and peaked in April. While bitcoin is slightly positive year to date, at this point in 2020, it traded below $10,000 per token.
Watch these key levels for bitcoin next after its break below $30,000, traders say
Bitcoin fell again on Tuesday, this time breaking below the critical $30,000 level.
That price has been highlighted by institutional investors as a key level of support.
Despite the market rebounding slightly on Tuesday, this move in bitcoin comes as investors look to mitigate risk with the spread of the delta Covid variant putting additional pressure on the broader market.
Other cryptocurrencies were also lower Tuesday. Ether, litecoin and dogecoin all spent the day in the red.
In an interview with CNBC’s “Trading Nation,” Delano Saporu, founder of New Street Advisors, said he sees more pain ahead for bitcoin.
“I think you probably have more downside, maybe to around the $22,000 range [to] the $17,000 range for bitcoin going back to Dec. 20 of last year,” he said Tuesday. However, “from there, I do think there’ll be upside,” he said.
While short-term traders who invested in bitcoin at its highs are feeling the pain now, Saporu sees the cryptocurrency paying off for long-term investors.
Bitcoin drops back below $30,000, heads toward new low for the year
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A representations of virtual currency Bitcoin is seen in front of a stock graph in this illustration taken May 19, 2021. Dado Ruvic | Reuters
The price of bitcoin dropped below $30,000 late Monday night for the first time since Jun. 22, dragging other digital coins lower with it. Bitcoin is trading in the $29,000 range, about 3% lower on the day, according to Coin Metrics. Ether is down 1.25% and XRP fell 4%. Even with the plunge bitcoin is up 2.3% for the year, according to CoinDesk data. Ether and XRP are both up about 140% for the year. The plunge came amid news that the New Jersey Attorney General issued a Cease and Desist Order against the New Jersey-based crypto services firm BlockFi, ordering it to stop offering interest-bearing accounts, according to Forbes and later confirmed on Twitter by the company CEO.
It also came after a big sell-off in global stock markets Monday, when the Dow Jones Industrial Average had its worst day since last October, though the markets reclaimed much of their losses Tuesday. “There’s been a broad sell-off in global markets, risk assets are down across the board,” Annabelle Huang, partner at cryptocurrency financial services firm Amber Group, said. There are “concerns of the quality and strength of economic recovery” and “broader risk assets turned weaker including high yields,” Huang said. “Coupled with recent BTC (bitcoin) weakness, this just sent crypto market down further.”
At one point early Tuesday, about $89 billion was wiped off the entire cryptocurrency market in a 24-hour period. Since bitcoin’s all-time high of nearly $65,000 in mid-April, its price has plunged over 50%.
Regulatory scrutiny
Regulators around the world are also looking more closely at the crypto space. Binance, the world’s largest cryptocurrency exchange, last month was barred by U.K. authorities from carrying out any regulated activities in the country. Regulators in Japan, Canada and Thailand have also issued warnings about Binance. “In general we’re seeing more regulatory focus on crypto and bitcoin,” said Vijay Ayyar, head of business development at cryptocurrency exchange Luno.
More selling ahead?