Billionaire hedge fund founder of Citadel warns bitcoin ‘bubble’ may end in tears for investors
Ken Griffin worries the bitcoin bubble could hit investors badly
Ken Griffin, founder of the US$27 billion hedge fund Citadel, said the bitcoin frenzy resembles Holland’s tulip mania centuries ago.
“Is bitcoin a fraud? No,” Griffin said in an interview on Monday. “But these bubbles tend to end in tears, and I worry about how this bubble might end.”
The leader of the Chicago-based firm, which makes its money from stock picking and quantitative strategies, said that valuations in the overall market were more stretched now than is typical, driven by low interest rates, low inflation and reasonable growth in revenues.
“We’re in the seventh inning of this market rally,” he said. “But it’s not in the classic mania of a bull market.”
Griffin said that while tax reform for individuals is well thought-out by Congress, lawmakers may be driving the corporate tax rate too low.
“I would have thought we would have landed it somewhere around 25 per cent for our corporate rate, not 20,” he said. “But probably not worth splitting hairs over.”