Citadel CEO Compares Bitcoin Frenzy to Tulip Mania

With Bitcoin poised to break through the $10,000 barrier, Kenneth C. Griffin, the billionaire hedge fund manager behind Citadel, has expressed the concern that the cryptocurrency is a bubble, reminiscent of the 17th-century tulip bulb mania.

During an interview with CNBC, Griffin, who founded Citadel (one of the largest global investment firms) in 1990 and is currently serving as the CEO, praised blockchain technology, but expressed his reservations about Bitcoin.

“Bitcoin right now has many of the elements of the tulip bulb mania we saw back hundreds of years ago in Holland...Blockchain's a very interesting technology that will have some very profound applications for society over the years to come.”

He went on to claim that it seemed people were confusing Bitcoin with blockchain, and were buying Bitcoin simply on the basis of media hype, without actually understanding what they were getting into.

“I think what is happening is people confuse Bitcoin with blockchain. I get very worried that people that are buying Bitcoins don't really understand what they're participating in other than the headline stories that it keeps going higher and 'I want to make sure I don't miss this opportunity to make some money’.”

Griffin’s concerns and comparisons are hardly new. Vocal Bitcoin critic JPMorgan CEO Jamie Dimon has previously called the cryptocurrency a bubble, and likened it to tulip mania, terming it a “fraud” that will end badly.

“It's worse than tulip bulbs. It won't end well. Someone is going to get killed,” said Dimon earlier this year.

“So is it a fraud? No. But these bubbles tend to end in tears. And I worry about how this bubble might end.”

Although Bitcoin’s critics are among the most prominent names in the finance industry, including Jamie Dimon, Ray Dalio, Larry Fink, and Kenneth Griffin, the cryptocurrency seems to steadily be establishing itself in the mainstream – helped, to a large extent, by the Chicago Mercantile Exchange’s announcement about a Bitcoin futures contract, which is due to launch in December and is expected to bring in a lot of institutional investment.

Bitcoin has had a monumental 2017, cruising from $1,000 at the start of the year to almost $10,000, and it seems the cryptocurrency is set to brush off all criticism as it continues its incredible bull run.