US hedge fund Citadel CEO: Bitcoin will be replaced by Ethereum-based tokens

Billionaire Kenneth Griffin, chief executive of U.S. hedge fund Citadel, believes a currency on the Ethereum (ETH) network will replace Bitcoin (BTC) as the overlord of cryptocurrencies. Citadel manages more than $40 billion in capital—accounting for a quarter of U.S. stock market trading volume.

Speaking at this Wednesday, Nov. 10 DealBook Summit hosted by The New York Times, Griffin said he expects "in the next generation of cryptocurrencies, concepts based on Bitcoin will be replaced by concepts based on Ethereum."

He added that ethereum-based cryptocurrencies have the benefit of "higher transaction speed [and] lower cost per transaction."

Ethereum is currently only slightly faster than Bitcoin, but when fully implemented, Eth2 will significantly increase transaction speed and reduce costs.

Griffin has long been a skeptic of cryptocurrencies, especially Bitcoin - claiming that there is "no commercial use case."

Although he pointed out that cryptocurrencies and their underlying blockchain technology are "very interesting technology" and "a powerful way to maintain a decentralized ledger on a global scale," he concluded that "for most problems, it's really not The solution we need."

“There is a lot of focus on a world of new ideas and new creations,” he said. “I fear that enthusiasm is somewhat misplaced when it comes to cryptocurrencies.”

During the summit, he claimed that "there are many problems that cryptocurrencies are not solving," including fraud risks, high costs and energy consumption.

"Bitcoin is very expensive to manage payments," he said. The current cost per bitcoin transaction is about $4.1. Typical credit card transaction fees range from 1.4% to 3.5% on popular networks like MasterCard, Visa, and American Express. Debit cards have a referral surcharge of approximately 0.5%.

In terms of sustainability, Griffin claimed that Bitcoin “has a greater impact on global warming than any form of payment we use around the world today.”

Bitcoin’s annual carbon footprint is approximately 90.48 tons of CO2. According to the Bitcoin Energy Consumption Index, each Bitcoin transaction has a carbon footprint equivalent to 2,008,657 VISA transactions.

On the other hand, Bitcoin mining also utilizes the lowest-cost forms of energy, such as renewable energy and surplus electricity that would otherwise be wasted. It is also much more difficult to actually quantify the emissions of banks and financial institutions.

Asked if he was concerned that he might have missed the crypto train, he said: "I think the train is still in the station in a sense ... I think it's still in the early days."

Earlier this year, rumors surfaced that Citadel was behind Robinhood's trading restrictions on gamstock stock. He denied any involvement during the summit, calling it a "bad comedic joke".