Citadel CEO's Latest Interview: "Red Wave," the Trump Administration, the U.S. Economy, and the Future of Cryptocurrency

Original Title: Capital, Politics and Power: Ken Griffin on the 2024 Election and What’s Next for the U.S. Economy
Compiled by: zhouzhou, BlockBeats

Editor’s Note: This conversation is about the U.S. economy, investment, cryptocurrency, and future technologies, focusing on the flexibility of American capitalism, entrepreneurship, the potential of cryptocurrency, and the future of investment. In particular, the guest discusses his views on cryptocurrency, expressing a reserved attitude towards its future despite missing investment opportunities. The discussion also covers wealth growth, technological innovation, economic differences between Europe and the U.S., and future market trends.

The following is the original content (edited for readability):

Host: Today's guest is Ken Griffin, the founder and CEO of Citadel. I believe he is one of the most influential individuals in the current financial markets. His hedge fund manages about $65 billion in assets, but perhaps more importantly, Citadel Securities handles nearly a quarter of the trading volume in the U.S. stock market every day.

He is also a significant philanthropist and has considerable influence in American politics. In the recent election cycle, he was one of the top five donors to the Republican Party, second only to Elon Musk.

I want to start with politics and policy, as you were mentioned as one of the largest donors to the Republican Party. Interestingly, I noticed that you did not donate to the election of President Trump. I want to read you a quote; in October, you said, "I did not support Donald Trump, and I am conflicted about this issue. I know who I am going to vote for, but I am not happy." Now that the election is over, are you happy?

Ken Griffin: Yes, because the Republican Party won the House, the Senate, and the White House. We now have the opportunity to govern and make America serve ordinary Americans, bringing the country back to one that is principled, powerful, and prosperous. I am excited about this possibility.

On the Second Trump Administration

Host: Can you talk about your dissatisfaction with the elected president?

Ken Griffin: I think the elected president has faced tremendous personal pressure in recent months. Imagine facing the endless attacks from the American legal system and nearly facing an assassination—he was really just an inch away. But he persevered and won the election. At that time, we saw a person under immense pressure, and that is undeniable.

This pressure does not always bring out the best in him, which is understandable. However, now that he is the elected president, I will support him in his future role as President of the United States to the best of my ability.

Host: You mentioned that you were not happy when voting; I guess you voted for him, right? So you are satisfied with this outcome?

Ken Griffin: Yes, I voted for him. I believe that between the two candidates, from a policy perspective, this is clearly the best outcome.

Host: So let's talk about some policy issues, perhaps the biggest one being tariffs. This issue currently has no clear answer, but its impact on the economy is enormous.

Ken Griffin: The U.S. has reopened for business, and the paralysis caused by regulation and litigation during the Biden administration has ended. So when I talk to a group of American business executives, whether they are from the telecommunications industry or consumer sectors, regardless of whether they voted for Trump or Harris, they are all smiling. Because they can now focus on creating value for customers, creating jobs, growing their businesses, and achieving prosperity, rather than being bogged down by endless meaningless lawsuits and regulations.

For example, Lina Khan seems to have completely missed the advanced economics courses in college. Her role in undermining American productivity is significant. Therefore, I believe that for America, all the discussions about tariffs and energy extraction are secondary; the primary issue is that America has started to develop businesses again.

Host: Why do you say these are secondary? The regulatory policies of the Biden administration have indeed brought a lot of uncertainty.

Ken Griffin: This is not uncertainty; it is a complete loss.

Host: Now there is new uncertainty, such as the tariff issue. What do you think about this?

Ken Griffin: I think it may take months or even years to figure out the direction of all this. It is clear that this uncertainty will indeed weaken capital formation, there is no doubt about that. At the same time, we must remember that the president's background is in real estate, and the negotiation rules in real estate often differ from what we see in stock or bond trading.

In real estate, you might buy a building every few months or years, and you may never deal with the same seller again. The negotiation dynamics in this model are completely different from frequent daily transactions. I believe the president has brought this behavioral model to the White House because it is part of his economic background.

He will take some bold positions and then observe the reactions. For example, you will see his threats regarding tariffs on Canada and Mexico.

Host: I think a bigger issue might be about the "BRICS" countries, for instance, the elected president stated that if these BRICS countries try to establish their own currency system, the U.S. will impose tariffs on all of them. I think this new uncertainty might be something you did not anticipate before?

Ken Griffin: The key is: where will this lead? The president will not do that, and it will not happen. The BRICS countries will not detach from the dollar in the next four years. He will not retaliate against their trade or other matters because of this.

Host: Language is indeed important. When we read his tweets, statements, or other social media content, some words may seem meaningless. Do you think his declarations, even if you think they won’t come true, will have any impact on the country?

Ken Griffin: Of course, it will have an impact. As a media person, you should know that language has power.

Host: I agree, so I am curious, is this language important to you?

Ken Griffin: It is certainly important, which is why I couldn't smile when I voted. I hope his language is more precise, and that the ideas he conveys are more transparent, clear, and easy to understand. But the core values he expresses—America can be an exceptional country, a country where people can live better lives, a country where people can make their own decisions—these values resonate throughout the nation.

Host: We need to distinguish the big picture; the significance of this government is that it represents a free America, a prosperous America, a strong America, and a respected America. We should focus on these big-picture issues, as they are the core of America. However, the issue of "being respected" is indeed interesting, right? If you are constantly in conflict with all surrounding countries, this will become a core issue.

Ken Griffin: There is no doubt that the whole world is looking forward to American leadership. While we may issue tariff threats to Mexico or Canada, these are minor issues compared to the world's expectations of America. For example, when we tell Hamas to release hostages before the president's inauguration, such statements have significant implications for the entire world.

Host: Let me ask you a question. Trump just appointed Scott Besson as Secretary of the Treasury. I know you previously supported Mark Rowen, who was at Apollo at the time. What do you think of Scott Besson as Secretary of the Treasury?

Ken Griffin: I personally do not know Scott, but I have a friend who is one of the most successful fund managers in history, and he speaks highly of Scott. Frankly, Mark Rowen is very good at managing large organizations. From my perspective, the people around the president need to have the ability to manage large organizations, which is a very important skill. So I can easily be excited about Mark, but that does not mean Scott cannot do the job.

Host: The reason I ask about Scott Besson is that he has mentioned the potential to undermine the independence of the Federal Reserve, and we will soon see Trump and the current Federal Reserve Chairman Powell. Scott Besson has publicly discussed the idea of creating a so-called "shadow Federal Reserve Chairman." This person would be nominated to the Federal Reserve but could influence the market even if not within the Federal Reserve, leading investors to be skeptical of the current Federal Reserve Chairman's policies and more inclined to predict what the next chairman might do. What do you think of this idea?

On the U.S. Economy in the Next Four Years

Ken Griffin: We need to return to the fundamental issue; the independence of the Federal Reserve is crucial for the stability of the dollar. I have publicly supported Powell, not just in recent months but for many years, because I genuinely believe that the independence of the Federal Reserve is vital for maintaining and enhancing the health of the American economy, regardless of whether it is President Trump or any former president.

Of course, every president will have some opposition when the Federal Reserve makes tough decisions. From a political perspective, when the Federal Reserve raises interest rates to control inflation, leading to job losses, as president, you cannot say, "That's great; I am very excited about this." No one expects a president to play such a role. The responsibility of the Federal Reserve Chairman is precisely to make those tough decisions that politicians dare not face.

Host: So far, how would you rate Jay Powell's performance?

Ken Griffin: I want to clarify that Jay Powell faces one of the worst jobs because the Biden administration has pushed this country onto an unprecedented inflationary path with its irresponsible fiscal spending, and then he has to deal with cleaning up the massive fiscal deficits, just as this government needs to clean up those deficits. So, his job has been very difficult over the past few years, with almost no chance of success.

Therefore, some people believe he may have successfully landed, or at least achieved a soft landing, or that we are still circling in the air. You can look at the stock market now. It feels good in the short term, but as Scott said, I applaud him; we must sort out the fiscal issues. As we organize federal finances, this will have other impacts on our economy, and both the legislature and the Federal Reserve must address these issues.

Host: So now, the stock market looks good, while the bond market may perform differently. What do you think is happening?

Ken Griffin: I think the fluctuations in the bond market over the past few weeks have not been significant, although it has reacted somewhat.

Host: If you are an investor in the stock market, do you think what is happening now makes sense?

Ken Griffin: Without a doubt, let’s return to the opening comments about American businesses; the situation now is better than before the election.

Host: Wouldn’t that undermine all other uncertainties? Or do you think these uncertainties simply won’t happen, and that’s what we should decide?

Ken Griffin: No, this is the difference between understanding the big picture and getting caught up in trivialities. It’s like seeing the tree but not the forest.

Host: But considering the White House, as you said, Congress and the Senate have turned red. Is there any controlling factor, perhaps the bond market, that will ultimately discuss spending and other upcoming matters, or matters that won’t happen? Do you think if we don’t get a grip on the situation, the bond market will be affected?

Ken Griffin: If we do not sort out our finances, the bond market should be affected; I mean, that is precisely what the bond market should do.

Host: Do you believe in Elon Musk and Doge? Because this relates to whether the bond market thinks we have gotten a grip on the situation.

Ken Griffin: It is somewhat absurd to place all the responsibility on Elon Musk, and we now have some extremely capable, competent, and intelligent people helping the president's advisors. We have returned to the good old days when such people were not in the White House, and I would now be willing to let Elon into the White House. What we hope for is that the president, Congress, the Senate, and the judiciary can all play a role in opposing crony capitalism.

Whether it is the current administration or the previous one, one of my biggest concerns is the increase of crony capitalism in America. When we play favorites with taxpayers' money in Washington, choosing winners and losers, it is truly unfair to American taxpayers, American consumers, and future generations. And this is not just a Washington issue. Look at California, trying to provide electric vehicle subsidies to all companies except Tesla. I mean, it is simply incomprehensible how shocking that is.

Host: You are an investor in Tesla.

Ken Griffin: That was a few weeks ago; we trade a quarter of the stocks in the U.S. market every day.

Host: That is true. I am actually very interested; if you are an investor in Tesla or at least interested in it, an important decision was made this week. I don’t know if you are aware, but regarding Elon Musk's compensation package, this issue has been pending for the past year. What are your thoughts on this? In this case, shareholders voted to approve the compensation package, while the court in Delaware, where Tesla is registered, stated that it is unacceptable. What are your thoughts?

Ken Griffin: I can only say one thing: if you have $5 billion at risk and it is still fine, that must be fantastic, but can you imagine that risk?

Host: In fact, this raises a question. You happen to be one of the richest people in this country; perhaps you don’t have an extra $5 billion lying around, but you are at the top. I want to read you something; I am curious about how it affects you.

Warren Buffett just wrote a letter; I don’t know if you have seen it. He talked about donating more money and letting his children do it. He wrote the following, which I found very interesting. He said he was confident he would become wealthy at a young age, but neither I nor anyone else ever thought that the wealth that could be obtained in America over the past few decades would be so enormous.

He even couldn’t believe such a thing would happen, even for himself; he said it was beyond Ford, Carnegie, Morgan, or Rockefeller’s imagination. Today, billions have become the new millions. What do you think of this idea? Because I think it is indeed a significant shift in our culture and society.

Ken Griffin: This is an astonishing part of American history. About 125 years ago, nearly half of the American population worked in agriculture. The transformation of our economy over 12 decades is shocking. Now we are at an interesting economic juncture where a smart idea can be rapidly brought to market and reach billions of consumers overnight.

In fact, think about the immediate influence we gain from this meeting today. Meetings like this can now connect you to the whole world, which I would have thought impossible 50 years ago. So this means that in this era, great entrepreneurs have the ability to create an idea, bring it to market, and launch it globally in a way that was previously unimaginable. Right? If you think back 70 years, you opened a single retail store. If everything went well, you might open another store a few miles down the road or in the next town, right? But today, with Jeff Bezos's Amazon, yes, Amazon provides everyone with immediate access, but you cannot imagine what it was like 50 years ago.

Host: I do not oppose this; it is an amazing thing. But the question is, if billions are the new millions, then I guess we will soon see trillions.

Ken Griffin: I think Warren is very clever in his choice of words. After all, the number of millionaires is much smaller than that of billionaires.

Host: Sean Fain said billionaires should not exist at all. You are a capitalist; what do you think? I just want to know your thoughts on this despair.

Ken Griffin: That is where he has problems with many things—he does not understand the consequences of his actions. We can all become poor, but I would rather not be poor, and everyone would rather not be poor. In our country, we would rather not become Venezuela.

Host: I have a few quick questions to ask you, actually one about your current specific business.**

Ken Griffin: The flexibility of the American capital system and the American labor market is an important part of the story of our country's standard of living, which no other country can match. On average, the standard of living is so high, and children have so many opportunities. Look at Europe; compared to America, it is simply sluggish. It is a continent that is disappearing on all levels; their birth rates are a challenge, economic growth is slow, per capita data is heartbreaking, and there is no optimism for the future. Do you want to become Europe? I do not. I want to be an American.

Host: I want to ask about the investment business because it has changed a lot over the years. I think there are now two models running. One is the model you are in; I would put you, Millennium Capital, perhaps Point72, and even Jane Street in this category. The other is those individuals with their own companies. A question is whether we can effectively compete with larger firms. What do you think of this concept?

Ken Griffin: If Serena Williams came today and played tennis with me, I would say, "Wouldn't you express your point through tennis?"

Host: What I mean is that there are now two such massive funds acquiring various information. I am not saying illegally obtaining information, but these large teams can pass the cost of acquiring vast amounts of information onto their investors. This is completely different from the business model of 10 or 20 years ago. If you were to start a small fund today, do you think you could compete with your current enterprise?

Ken Griffin: That is the power of youthful naivety, right? Just like when I started, I had to compete with companies like Solomon Brothers and Goldman Sachs, which seemed enormous.

Host: So if you were to start a fund or do something today, what would you do?

Ken Griffin: This is what entrepreneurs have; they have that belief: even though you have almost no chance under any set of metrics, I am going to do it anyway. Do you think Elon Musk thinks he can beat the big car companies just based on first principles? No, I think it is about hard work and bringing better people together and then finding ways, like an entrepreneur, to achieve goals.

What has changed in the investment business over the past 30 years? There have certainly been huge changes; the rise of passive investing has been tremendous. Now nearly 50% of all assets are in passive investment vehicles, which have almost no cost to investors. But the premise of these tools is that the market is efficient because active management firms like Citadel, Millennium, and Point72 exist.

And it should be clear that there are also hundreds of other very good, very capable hedge funds, like D1, etc. These are all doing very well, conducting very good research. Because that is the interesting part of my job. My job is essentially research work. As you said, it is about gathering information, drawing conclusions, understanding business models, understanding products, and understanding which parts are not reflected in stock prices.

Host: Among the good things happening in this country that you mentioned, considering all these factors, what large-scale investments would you make now? Are there specific areas or companies you would invest in?

Ken Griffin: The global trend is more resources flowing to the U.S.; this is the global trend because it is the most vibrant country.

Host: Do you have a particular industry, company, or place in mind that you can tell everyone, "This is the direction we are going"?

Ken Griffin: This is the challenge between investment and the economy; the direction of the economy is clear. Healthcare will continue to become increasingly important, technology will continue to attract resources, and continue to innovate our lives. But the question is, as investment objects, have we fully reflected a bright future in the valuations of these companies, or have we over-reflected a bright future?

On the Future Development of Cryptocurrency

Host: So what do you think about another rapidly developing area now? That is Bitcoin and cryptocurrency.

Ken Griffin: Let’s end with this. What do you think?

Host: So cryptocurrency is not interesting to you at all?

Ken Griffin: Just like I own some oiled canvases; the canvas might have cost $15, and the oil paint about $20, totaling around $35, but these paintings trade for tens of millions of dollars. What right do I have to evaluate cryptocurrency?

Host: But you have been asked to evaluate cryptocurrency for a long time, and you have made a judgment by not buying it, right?

Ken Griffin: That is indeed a mistake.

Host: So do you regret it now? I am a journalist; I am being honest. I hold mutual funds but am not allowed to invest, so I missed out too.

Ken Griffin: That is a pity, but of course, I wish I had bought those things that were trading at prices 100 times what they are now a few years ago, right? We all have that psychology; it is a universal human psychology. There will always be, "What did we miss?" Then the second question is, I do not care what problem cryptocurrency can solve for our economy.

Host: What do you think will ultimately happen? Because you have mentioned many times what problems cryptocurrency solves and why we should solve these problems. Do you think the whole cryptocurrency thing is just a crazy speculative bubble that will ultimately end badly, as Warren Buffett said, or do you think it will continue to exist in this digital form and make sense?

Ken Griffin: I think it goes back to a similar question of why people voted for Trump: because they want to break free from government constraints.

Host: So perhaps it might have a future, right?

Ken Griffin: It might have a future. You have to remember that assets like this, an intangible asset, derive their value from intangible aspects, partly from the community, partly from the feeling of "I stand against state power," right? People derive joy from that. I think one phenomenon we saw in this election cycle is that the American people are saying, "I want to take control of my life," and cryptocurrency is part of that.

Host: What do you think of founders like those of Polymarket? What do you think about people betting on elections now? Is this a market? Is this an area you want to enter?

Ken Griffin: I don’t know; it is not something we want to do. But congratulations to Polymarket for building such an international brand with their huge bets on the Trump side in just a few weeks. I haven’t spent much time thinking about this issue.

Host: Shane, he doesn’t want to enter your industry. But I am indeed curious; since you now have a market where you can bet on various things, do you ultimately want to enter this industry?

Shane: You know I am a product builder; I can’t say I am a trader, but I do believe that everything having a market is inevitable, and this thriving situation is very exciting. Moreover, in my view, the biggest financial figures may underestimate this, thinking these markets are too small, but this is still an opportunity for us. I think, as Ken said, youthful naivety and entrepreneurship may turn those seemingly small opportunities into something very big tomorrow.

Host: Maybe we will all end up betting in these markets. Before you leave, I have one last question. A few years ago, I don’t know if you remember, you bid for a seat on a Blue Origin spaceship at a Robin Hood event, and you spent $8 million to buy that seat. Do you remember this? I do. And you gave the seat to a teacher. My question is, do you aspire to go to space yourself?

Ken Griffin: If you can live to 98, I will tell you.