Ken Griffin, the founder of one of the world’s biggest hedge fund, Citadel, has stated he was wrong about crypto.
“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,” Griffin said.
His company Citadel Securities has now sold some stake to Paradigm, a crypto investment firm co-founder by Fred Ehrsam who previously co-founded Coinbase.
“Citadel Securities has developed software and algorithms that have driven substantial improvement to market structures for the benefit of institutional and retail investors everywhere,” said Matt Huang, Co-Founder and Managing Partner of Paradigm.
They have come under fierce criticism by GME retail investors however who primarily blamed Citadel for GME developing a 140% short float.
The superiority of crypto showed itself in that saga when GME’s buy button was cancelled. Due to decentralized exchanges in defi and the listing of crypto assets on many exchanges, the same can’t quite happen in crypto.
“Crypto has been one of the great stories in finance over the course of the last 15 years,” Griffin says. “And I’ll be clear, I’ve been in the naysayer camp over that period of time… I still have my skepticism, but there are hundreds and millions of people in this world today who disagree with that.”
The crypto market has now clearly become too big to ignore with Citadel seemingly thinking of giving some competition to Alameda Research.
Founded by Sam Bankman-Fried, Alameda has been market making for years, with it “minting/redeeming USDT on an institutional scale,” according to Ryan Salame, Head of OTC at Alameda Research.
Instead of playing on whether price goes up or down, market makers try to put themselves in between buyers and sellers by say placing the top bid and ask so as to profit from the spread, the difference between a buy and the sell price on an exchange.
That’s what Citadel plans in a sign that institutional adoption is growing with Griffin saying “we have to give serious consideration to being a market maker in crypto. It’s fair to assume that over the months to come, you will see us engage in making markets in cryptocurrencies.”