Billionaire hedge fund manager and one of Bitcoin’s harshest and most vocal critics, Ken Griffin, seems to have had a change of heart, admitting that he was wrong about the crypto space and Bitcoin.
The founder of Citadel’s change in stance comes after his firm plans to offer digital assets to existing clients, with the company set to enter the crypto space later this year.
Citadel Exploring The Cryptocurrency Space
Griffin was in conversation with David Rubenstein on Bloomberg Wealth, where the topic revolved around the current state of the markets thanks to the recent geopolitical upheaval, with Griffin stating that the markets are currently at a “very volatile inflection point.”
Soon enough, the conversation veered its way towards digital assets, and Griffin, who had famously warned the younger generation to stay away from cryptocurrencies, stating that there is no need for cryptocurrencies, stated that his firm, Citadel, would be looking at engaging in the crypto market in 2022. He stated,
“It’s fair to assume that over the months to come, you will see us engage in making markets in cryptocurrencies.”
A Remarkable Turnaround
The comments by Griffin mark a stark turnaround from his earlier position regarding cryptocurrencies, which he had compared to the tulip bulb mania in a 2017 conversation. The tulip bulb mania was an event in Holland that took place in the 1600s where the contract prices for bulbs of the recently introduced tulip reached unbelievably high levels. Griffin had stated back in 2017,
“Bitcoin right now has many of the elements of the tulip bulb mania we saw back hundreds of years ago in Holland.” At the time, when BTC was trading around $10,000, he added, “these bubbles tend to end in tears. And I worry about how this bubble might end.”
Wrong About Digital Assets
During the interview with Bloomberg Wealth, Griffin acknowledged that he was wrong to doubt Bitcoin and other digital assets stating that cryptocurrencies have been among the greatest success stories in the financial space over the past 15 years. He further added,
“And I’ll be clear, I’ve been in the naysayer camp over that period of time. But the crypto market today has a market capitalization of about $2 trillion in round numbers, which tells you that I haven’t been right on this call.”
While he added that he was still a little skeptical, there were millions of people that disagreed with his views.
“There are hundreds and millions of people in this world today who disagree with that. To the extent that we’re trying to help institutions and investors solve their portfolio allocation problems, we have to give serious consideration to being a market maker in crypto.”
Citadel’s Crypto Plans
Citadel analyzes global markets, utilizing a host of strategies to deliver market-leading returns to its clients and partners. Now Griffin plans to include crypto assets into these strategies. As recently as January, Citadel announced its first outside investment worth around $1.15 billion from crypto venture capital firms Paradigm and Sequoia Capital. The investment pegged Citadel’s valuation at around $22 billion, with the firm having around $38 billion in assets under management.
Griffin’s Initial Position Against Crypto
In an interview with Bloomberg’s Erik Schatzker, Griffin had revealed why he was skeptical about crypto, calling it a jihadist call against the Dollar. He had also stated that he agreed with SEC Chairman Gary Gensler and his approach to crypto, stating,
“Doing so will make it a smaller market – because it’ll become a far more competitive market when there’s regulatory clarity. And that will be good. A small market, fewer people involved who are frankly just trying to make a quick buck.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Discussion about this post