Citadel's Ken Griffin, who runs the Citadel hedge fund, says he thinks Bitcoin will be disrupted by a superior cryptocurrency based on Ethereum's blockchain in coming years.
Speaking at The New York Times’ DealBook conference, Griffin said the only way one can value cryptocurrencies is by hoping that someone will buy them at a higher price in the future.
In general, Griffin remains skeptical of cryptocurrencies, and says he sees no commercial use for Bitcoin due to its large energy consumption, low transaction speeds, and vulnerability to fraud.
On the underlying blockchain technology that powers cryptocurrencies, Griffin said it's “really interesting technology, a powerful way to maintain a decentralized ledger around the world, but for most problems, it's really not the solution that we need.”
As for Bitcoin, Griffin believes a next generation cryptocurrency based on the Ethereum blockchain will likely displace it due to its faster transactions per second, smaller energy footprint, and lower transaction costs.
But ultimately, a digital dollar could disrupt the entire cryptocurrency space, Griffin said, pointing to China's work towards a digital yuan as an example.
“I think we are all still trying to understand if we want to hit this world of decentralized finance and want a payment system that is low cost and effective, is it going to be solved by the crypto community? Or is it going to be solved by a digital dollar?” Griffin asked, adding that developments are still in the very early stages.
