Kenneth Griffin, the CEO of US hedge fund Citadel, believes that the currency on the Ethereum network will replace Bitcoin (BTC) as the main dog of cryptocurrency. Citadel manages more than $40 billion of capital, which is a quarter of the volume of trading in the US stock market.
During Wednesday’s DealBook Summit hosted by The New York Times on November 10, Griffin said he expects “Bitcoin-based performance to be replaced by Ethereum-based performance in the next generation of cryptocurrencies.”
He added that Ethereum-based cryptocurrencies have “the benefits of higher transaction speed [and] lower transaction costs.”
Ethereum is currently slightly faster than Bitcoin, but it will significantly increase transaction speed and reduce costs when Ethereum 2.0 is fully implemented.
Griffin is a longtime skeptic of cryptocurrencies, especially bitcoin, which he says “has no commercial use.”
While noting that cryptocurrency and its underlying blockchain technology is a “really interesting technology” and “a powerful way to maintain decentralized public ledgers around the world,” he concluded, “For most problems, this is not really the solution. We need .”
“People are very focused on the world of new ideas and new creations,” he said. “It worries me that some of that passion is misplaced when it comes to cryptocurrency.”
During the summit, he stated that “there are a number of unresolved issues with cryptocurrency,” including fraud risks, high costs, and energy consumption.
“Bitcoin is too expensive to manage payments,” he said. It currently costs around $4.1 per bitcoin transaction. Typical credit card transaction fees range from 1.4% to 3.5% on popular networks such as Mastercard, Visa, and American Express. The recommended surcharge for debit cards is about 0.5%.
On sustainability, Griffin stated that Bitcoin is “a major contributor to global warming than any form of payment we use around the world today combined.”
Bitcoin’s annual carbon footprint is about 90.48 tons of carbon dioxide. According to the Bitcoin Energy Efficiency Index, each Bitcoin transaction has a corresponding carbon footprint of 2,008,657 Visa transactions.
On the other hand, bitcoin mining also uses the cheapest forms of energy such as renewables and surplus energy that would otherwise be wasted. It is also much more difficult to quantify the emissions that banks and financial institutions bear.
On the topic: Billionaire Ken Griffin Rejects Cryptocurrency as a “Jihad Call” Against the Dollar
When asked if he was concerned that he might actually have missed the cipher train, he said, “I think the train is still at the station for some reason…I think it’s still too early.”
Earlier this year, there were rumors that Citadel was violating Robinhood’s trading limits for GameStop shares. He denied any personal involvement in the saga during the summit, calling it a “bad comedic joke”.