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A Legendary Billionaire Market-Maker Issued A Serious Bitcoin Price Warning—And A Bold Ethereum Prediction

A Legendary Billionaire Market-Maker Issued A Serious Bitcoin Price Warning—And A Bold Ethereum Prediction
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Bitcoin and Ethereum jumped to all-time highs this week, pushing the combined cryptocurrency market to nearly $3 trillion.

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Bitcoin has fallen a bit since then, dropping around $60,000 per bitcoin, while Ethereum has also pulled back from highs near $5,000 per ether. The market capitalization of Bitcoin is currently about twice as much as Ethereum at $1.2 trillion, however, Ethereum closed the gap last year.

Now, legendary market maker and hedge fund billionaire Ken Griffin has warned that bitcoin will eventually be replaced by ethereum — but that ethereum will, in turn, be replaced by the next generation of cryptocurrencies.

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“First-generation cryptocurrencies, like Bitcoin for example, are incredibly expensive to manage payments. Bitcoin is a huge contributor to global warming, and it’s bigger than any form of payment we use around the world in aggregate,” Griffin said. New York times’ Andrew Ross Sorkin, speaking at the 2021 DealBook Summit. Griffin sees payments disruption as the “most attractive theory” for value-adding cryptocurrencies.

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“I don’t buy that entirely for a lot of reasons,” said Geffen, who added, asking, “Who deals with fraud risk?”

Griffin, who founded and runs the Chicago-based hedge fund Citadel that manages about $40 billion in assets, cited card companies’ willingness to cover the costs of fraud and theft as one of “a number of issues not addressed by crypto as how to make payments more efficient.” “.

Pointing to a handful of Ethereum competitors, including Binance’s BNB, Solana and Cardano, which have seen their prices rise at an astonishing rate over the past year, Griffin said. The train is still at the station.

Griffin anticipates that these newer cryptocurrencies will be replaced by the next generation that will have “the benefits of faster transaction speeds, lower costs per transaction, and perhaps people start thinking about how to better handle security and fraud prevention.”

The price of Ethereum has skyrocketed in recent months thanks to growing interest in blockchain-based decentralized finance (DeFi) and non-fungible tokens (NFTs) — both built largely on top of the ethereum network.

Many in the crypto community previously predicted that Ethereum could eventually overtake Bitcoin as the most valuable cryptocurrency, with DeFi – the idea that traditional financial services could be replaced by blockchain-based protocols – and NFTs – using cryptographic technology to encode all kinds of digital media. And assets – help drive the adoption of Ethereum, and thus the price of the Ethereum tokens.

Griffin also revealed that he regretted not buying bitcoin years ago when a Citadel intern advised him.

“There was a 21-year-old trainee [that tried to tell me] “The big picture I was missing with bitcoin, I wish I had bought the bitcoins he recommended, but I didn’t,” said Griffin. “We talked about the power of blockchain but we still don’t see a lot of strong commercial use cases. [for blockchain]And [which] It’s a really interesting technology, and a powerful way to maintain decentralized ledgers around the world, but for most problems it’s not really the solution we need. “

Inspired in part by bitcoin, and spurred by Facebook’s recent attempts to create a private digital currency, governments around the world have begun experimenting with digital versions of their currencies, with the US Federal Reserve exploring a potential digital dollar, and China already beginning an early rollout. Digital yuan version.

“I think we are all still trying to understand if we want access to this world of decentralized finance and want a low-cost and efficient payment system, is it going to be solved by the crypto community? Or is it going to be solved? with a digital dollar,” Griffin asked. “All Chinese use the digital renminbi. I think this is still in its infancy.”

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Griffin is skeptical about the valuation of Bitcoin, Ethereum and other major cryptocurrencies that have surged in recent years, asking, “When it comes to cryptocurrencies, what is the basis for valuation? It is whether someone will pay me more for it tomorrow.”

Over the past year, pandemic shutdowns and massive government stimulus injections into financial systems have boosted asset prices across the board.

“We created a whole new class of savers because a year ago we couldn’t spend money like meme stocks and cryptocurrency,” Griffin said. “People are so focused on the world of new ideas and new creations. I fear some of that passion is misplaced when it comes to cryptocurrency.”

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