According to a Wednesday interview with DealBook’s Andrew Ross Sorkin, Citadel’s Ken Griffin believes that in the future, a superior cryptocurrency based on ethereum’s blockchain will challenge bitcoin.
Griffin made the remarks after claiming that the only way to value cryptocurrencies is to hope that someone will acquire them at a greater price in the future. Griffin is still suspicious of cryptocurrency and sees no economic use for it due to its high energy footprint, slow transaction rates, and vulnerability to fraud.
On the underlying blockchain technology that powers cryptocurrencies, Griffin said it’s “really interesting technology, a powerful way to maintain a decentralized ledger around the world, but for most problems, it’s really not the solution that we need,” Griffin said.
Griffin believes that a next-generation cryptocurrency based on the ethereum blockchain will likely supplant bitcoin due to faster transactions per second, a smaller energy footprint, and reduced transaction fees.
However, Griffin believes that a digital dollar might eventually disrupt the entire cryptocurrency industry, citing China’s work on a digital yuan as an example.
“I think we are all still trying to understand if we want to hit this world of decentralized finance and want a payment system that is low cost and effective, is it going to be solved by the crypto community? Or is it going to be solved by a digital dollar?” Griffin asked, adding that developments are still in the very early innings.
Griffin stated that everyone benefits from Citadel’s payment for order flow relationship with Robinhood, and that “most of the 20-year-olds I know are genuinely grateful for the current market system in America.” Payment for order flow allows online brokerage businesses to offer no-commission trading and fractional share investing.
However, some retail investors have accused Griffin of being a significant player in a plot involving Citadel, Robinhood, and meme-stocks such as GameStop and AMC Entertainment. Much of the theory discussed on Reddit’s WallStreetBets revolves around the claim that Citadel compelled online brokerages to impede investors’ ability to purchase shares of GameStop and other meme-stocks during its massive short-squeeze earlier this year.
The conspiracy claim has not been proven, with a recent SEC report finding no evidence to support it.
Griffin responded by describing the conspiracy in which he is a character as “a horrible comedy joke tale, like a ‘Saturday Night Live’ joke in real time.”
In answer to a query on Tesla CEO Elon Musk’s poll of Twitter followers asking if he should sell 10% of his share, the executive claimed he and Musk “live in a very different planet.”
“I have known Elon for a long time, I never thought we would let our ownership stakes be dictated by a poll on Twitter,” Griffin said. Musk posted a poll last weekend that found he should sell a $20 billion interest in his company.