Citadel’s Ken Griffin: Investors Abandoning Bitcoin, NFTs and Meme Stocks Are Good for the Economy

People moving on from the “speculative bubble” that is crypto, NFTs and meme stocks is a positive sign for the US economy, according to Wall Street heavyweight Ken Griffin.

Miami-based trading firm Citadel Securities’ founder said in a Wednesday interview with CNBC that government handouts in 2020, in response to the COVID-19 shutdowns, caused investors to pump their money into “speculative assets” such as NFTscrypto and meme shares.

So-called meme stocks, shares in companies that gain a following via social media, became hugely popular in 2021 when young traders bought up shares previously shorted by hedge funds of the moribund video game retailer GameStop—and sent Wall Street into chaos.

That same year, the market for NFTs, unique tokens that represent ownership over digital assets, became the latest craze. The assets sold for obscene amounts cash when celebrities got involved and led to an influx of amateur investors. The newfound mainstream attention no doubt played a big role in the price of Bitcoin and virtually every other coin and token is reaching new heights.

But now the bubble has burst, said Griffin – and it is “healthy” for the American economy.

“Now that we’ve passed that moment and people are starting to use their savings to travel, eat out, enjoy other things in life that they want, we’re seeing the speculative bubble really deflate,” the billionaire said at CNBC’s Delivering Alpha Conference on Wednesday.

“And this is healthy for the economy. Money misallocated in speculative assets doesn’t create jobs in the long run, doesn’t help create the long-term prosperity that makes America the country it is,” he said.

Griffin added that younger people — including those who work for him — are interested in crypto because they have a more “libertarian view of the world” and value privacy.

But he said “billions of dollars going into companies that are actually going to go broke, tens of billions” is not good for the markets. A number of crypto companies—including lender Celsius– went bankrupt this year when their business model proved unsustainable, losing investors billions of dollars.

The hedge fund manager has a reputation for criticizing crypto. He once called the room a “jihadist conversation” against the US dollar, and so his firm stayed away from digital assets because he didn’t want to “help finance the North Koreans.”

Griffin once overbid a group of crypto investors who wanted to use theirs Ethereum to purchase a rare copy of the US Constitution by spending $43.2 million on the document.