- Citadel CEO Ken Griffin has been a vocal critic of speculative assets like meme stocks and cryptocurrencies.
- The fall of cryptocurrency exchange FTX exacerbated Griffin’s bearishness against the crypto industry and has raised concerns about investor confidence in financial markets.
- Not long ago, Ken Griffin said he sees the poor performance of crypto, NFTs, and meme stocks as healthy for the economy.
Griffin on the FTX crash
Recently, the collapse of cryptocurrency broker FTX has raised many concerns about the crypto space.
Citadel’s Ken Griffin, known as a longtime crypto skeptic, was asked about the FTX debacle during an interview at the Bloomberg New Economy Forum in Singapore. He said that FTX “is one of those absolute travesties in the history of financial markets.”
According to Griffin, the billions of dollars that traders have lost using crypto have hurt the confidence of all financial markets. This is the peak of cryptocurrency’s fall in value over the past two years, which Griffin says has had serious consequences for investors.
“It’s terrible because the 20-40 year olds who are so committed to crypto need to save for their retirement… They need to own stocks… They need to participate in our global capital markets,” Ken Griffin said.
Ken Griffin’s relationship with Crypto
Earlier this year, however, Griffin stated that he was ready to start a new relationship with the crypto industry, admitting he was wrong in his skepticism.
during one Bloomberg In an interview in March, the CEO of Citadel said, “Crypto has been one of the big stories in finance over the last 15 years.
Although he made it clear that he still had doubts about the industry, he had also said that Citadel would start investing in cryptocurrencies later in 2022 and reported that the company was considering becoming a crypto market maker.
“You can expect that we will be busy creating markets for cryptocurrencies in the coming months,” he said.
“To the extent that we are trying to help institutions and investors solve their portfolio allocation problems, we must seriously consider being a market maker in crypto,” added Griffin.
CoinDesk in June reported that Citadel Securities was building a crypto trading marketplace, partnering with Virtu Financial and other venture capital firms.
However, by the time 2022 turned bearish for cryptocurrencies, Griffin had apparently changed his mind. Citadel has not reported any further developments on potential crypto plans.
Why Griffin thinks speculative assets aren’t healthy for the economy
Ken Griffin also has a negative opinion of meme stocks. A few months ago he said that the declining performance of speculative assets like meme stocks, NFTs and cryptocurrencies is healthy for the economy.
The Citadel CEO also blames the US government’s response to COVID as the cause of the asset bubbles. Griffin said the government, which continued to hand out stimulus checks after the worst of the pandemic, in many cases encouraged retail investors to invest in assets like meme stocks.
Instead, Griffin believes the government should have used that money for more productive purposes.
“Billions of dollars go to companies that are effectively going bankrupt, tens of billions, that’s money that isn’t going into how to treat Alzheimer’s or Parkinson’s or how to raise our children.”
Citadel Securities was in the midst of a controversy with the GameStop (GME) – Get a free report short press Event early 2021. The market maker was the driver of payment order flow (PFOF) through agreements with e-brokerages such as Robin Hood (HOOD) – Get a free report.
Also, the Citadel hedge fund provided $2 billion to investment firm Melvin Capital, a large short seller that was burned during GameStop’s January 2021 short squeeze.
Ken Griffin has denied all allegations of misconduct related to the event, and in November 2021, a US district court dismissed a class action lawsuit against the company, ruling that there was no evidence that Robinhood and Citadel colluded.
(Disclaimers: This is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence the editorial content. Thank you for supporting Wall support street memes.)