Written by: Fairy, ChainCatcher Edited by: TB, ChainCatcher
Early this morning, Bloomberg reported that Citadel Securities, one of the world's largest market makers, plans to enter the cryptocurrency market and is seeking to join the list of market makers of multiple exchanges. As soon as the news came out, it attracted widespread attention and discussion in the market. As a top player in the global financial market, how will Citadel Securities' entry change the landscape of the crypto market? What opportunities and challenges will it bring?
This article will use the method of ten questions and ten answers to deeply explore the significance and potential impact of Citadel Securities' entry into the field of cryptocurrency market making.
Citadel is currently the hottest player in the global financial market. It started as a small hedge fund and after years of development, it has gradually grown into one of the most profitable investment companies in the history of the financial industry.
Citadel is composed of Citadel LLC and Citadel Securities, of which Citadel Securities is a global market maker and Citadel LLC is a multinational hedge fund financial services company.
As a core participant in the US stock market, Citadel Securities has become the world's largest stock buyer and seller, accounting for nearly a quarter of the US stock market's trading share, involving more than 11,000 US-listed securities and more than 16,000 over-the-counter securities. In August 2024, its stock trading volume even surpassed the New York Stock Exchange.
On April 9, 2024, Citadel Securities was successfully selected into the "2024 Hurun Global Unicorn List" with a corporate valuation of RMB 155 billion, ranking 13th, becoming a giant that cannot be ignored in the global financial technology field.
Citadel Securities was founded by legendary investor Ken Griffin and is currently led by Zhao Peng as CEO. Zhao Peng was born in Beijing and is known as one of the top Chinese people on Wall Street. He was admitted to the Department of Mathematics at Peking University at the age of 14, and then obtained a doctorate degree from the University of California, Berkeley. After joining Citadel Securities, it took him less than 10 years to go from analyst to partner, general manager, and finally CEO. Citadel Securities has a highly professional and international team with a total of about 1,600 employees worldwide. 45% of the members have advanced degrees, and there are about 260 doctoral students. The research fields cover more than 40 disciplines, including applied mathematics, computer engineering, bioinformatics, and geophysics. The team members come from about 80 countries, reflecting its global layout and multicultural background.
In the past, due to the uncertainty of the US regulatory environment, Citadel Securities was cautious about digital assets and has avoided getting involved in retail-oriented crypto platforms.
Founder Ken Griffin was once a Bitcoin skeptic. Before Terra collapsed in 2022, Griffin said Citadel "may enter the crypto industry in the next few months." However, the Terra incident and the market crash may have frustrated his confidence in the crypto market, and Citadel ultimately did not take action.
In recent months, Griffin admitted to missing out on early opportunities in the crypto market and revealed at the UBS Financial Conference in 2025 that the company was considering entering the crypto market and acting as a market maker.
The key to Citadel Securities' success lies in its control of order flow and its in-depth mining and application of large amounts of data. The company processes up to $450 billion worth of trading information every day and makes decisions through complex predictive analysis and valuation.
Citadel Securities can accurately assess the fair value of stocks and options in different market environments. According to insiders, Citadel invests hundreds of millions of dollars in hard technology and quantitative research each year.
One of the company's most famous events was the GameStop short squeeze in 2021. Retail investors jointly went long on GameStop shares and successfully suppressed hedge funds that shorted the stock, causing hedge fund Melvin Capital to suffer huge losses and go bankrupt.
Investigations showed that most of Robinhood's orders in this process went to Citadel Securities. However, funds under Citadel LLC are partners of Melvin Capital and have injected $2 billion in the crisis. This dual role as both a market maker and an investor has caused controversy in the market.
In the most intense days of the short squeeze battle, Citadel Securities' daily trading volume reached 7.4 billion shares, exceeding the industry's average daily trading volume in 2019.
The community is divided into two camps on Citadel Securities' entry into the crypto market. One camp believes that this is a positive, but more people tend to be negative.
Positive:
Improve market liquidity: As a leading global market maker, Citadel Securities' entry can improve the liquidity of the crypto market.
Attract more investors: As a well-known financial institution, Citadel's participation will help attract more investors, especially institutional investors, to the crypto market, further driving capital inflows.
Regulation and compliance: Citadel's operations in traditional markets are generally subject to strict compliance and regulatory requirements. Citadel's compliance background will accelerate the integration of the crypto market with the traditional financial regulatory system, which may lead to higher KYC/AML requirements for exchanges and projects.
Negatives:
Potential for increased market manipulation: Citadel Securities has been controversial for its short-selling operations in traditional markets. Community users are concerned that as a large market maker, its strong market control may increase the risk of manipulation in the crypto market.
Market transparency: Community members reflected that Citadel’s short positions were not fully disclosed, and the 13F documents only showed long-term holdings, and its market-making short selling was usually daily operations rather than long-term bets.
Increased industry concentration: The entry of Citadel Securities may lead to further concentration of market resources in a few large institutions, and increased industry concentration. This may make the market more standardized and efficient, but it may also weaken the competitiveness of small and medium-sized participants.
Citadel Securities plans to join the market maker list of several mainstream crypto exchanges, including Coinbase Global Inc., Binance Holdings and Crypto.com. Once approved by the relevant exchanges, Citadel Securities plans to first establish a market making team outside the United States.
The company's ultimate push and interest in the crypto market may be affected by the introduction of new regulations in the coming months.
In 2023, Citadel Securities quietly entered the crypto market through EDX Markets. EDX Markets is a crypto exchange jointly launched by Citadel Securities, Charles Schwab and Fidelity Investments, which is only for institutional investors.
EDX Markets uses traditional market structures to process crypto transactions, providing institutional investors with a familiar execution and settlement model.
It will be more difficult for retail investors to make profits, and the "grassroots approach" of retail investors may be further squeezed out. Market opportunities and resources will be more concentrated in large institutions and high-net-worth investors, and retail investors will have more obvious disadvantages in information, technology and funds, making it much more difficult to make profits.
The survival pressure of small and medium-sized market makers will increase, and Citadel Securities will put tremendous pressure on existing small and medium-sized market makers. With its huge capital scale, advanced algorithmic trading system and global resource network, it is likely to dominate the liquidity provision and transaction execution efficiency. Many small and medium-sized market makers may be forced to exit the market because they cannot compete with it.
In addition, the entry of Citadel Securities may also trigger the reconfiguration of funds of non-market maker institutions.
Unlike competitors such as Jane Street and Jump Crypto, Citadel Securities previously kept its distance from crypto assets. However, as regulatory pressure intensified in 2023, companies such as Jane Street and Jump scaled back their presence in the U.S. crypto market, providing Citadel Securities with an opportunity to fill the gap in the market.
Citadel's delay in entering the crypto market may be due to considerations of market structure and regulatory risks. Its recent expansion of its crypto business also reflects that it is adapting to the changing U.S. regulatory environment.
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