Bitcoin and ethereum have rocketed to fresh all-time highs this week, propelling the combined crypto market to around $3 trillion.
The bitcoin price has since fallen back slightly, dropping toward $60,000 per bitcoin, while ethereum has also retreated from highs of near $5,000 per ether. Bitcoin’s market capitalization is currently around double ethereum’s at $1.2 trillion, however, ethereum has closed the gap this past year.
Now, legendary market-maker and hedge fund billionaire Ken Griffin has warned bitcoin will eventually be replaced by ethereum—but that ethereum will in turn be replaced by the next generation of cryptocurrencies.
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“The early generation cryptocurrencies, bitcoin for example, are incredibly expensive to manage payments on. Bitcoin is a huge contributor to global warming, bigger than any form of payments we use around the world in aggregate,” Griffin told The New York Times’ Andrew Ross Sorkin, speaking at the 2021 DealBook Summit. Griffin sees payments disruption as “the most attractive theory” for giving cryptocurrencies value.
“Visa
and Mastercard
will be replaced by a crypto solution that will be a lower cost of making payments happen between businesses and consumers,” said Giffin, who added: “I don’t fully buy that for a lot of reasons,” asking: “Who deals with fraud risk?”
Griffin, who founded and runs the Chicago-based hedge fund Citadel that manages around $40 billion in assets, pointed to card companies’ willingness to cover fraud and theft costs as one of “a number of issues that haven’t been addressed by crypto as to how payments will be made more efficient.”
“I think we’re going to see bitcoin replaced conceptually by ‘the ethereums’,” said Griffin, referring to a handful of ethereum rivals, including Binance’s BNB, solana and cardano, that have seen their prices soar at a blistering rate over the last year. “The train is still in the station.”
Griffin predicts these newer cryptocurrencies will then be replaced by the next generation that will have “the benefits of higher transaction speeds, lower cost per transaction, perhaps people will start thinking about how to better deal with security and fraud prevention.”
The ethereum price has surged in recent months thanks to booming interest in blockchain-based decentralized…
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