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Elliot Pollack Against Crypto: Here's Why.

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EDITOR'S NOTE: It seems like everyone in the financial world is bullish on crypto these days, but that isn’t necessarily the case. Business Insider reports that Elliott Management, the $48 billion managers founded by famed activist Paul Singer, is staying away from crypto. They predict “that cryptos will be crushed when the Federal Reserve comes out with its own ‘electronic dollar.’" Co-CIO and co-CEO of Elliott, Jonathan Pollock, explains, “The whole space kind of infringes on the domain that has traditionally been the space of the sovereign. It's hard for us to invest something that could effectively be regulated out of existence with a stroke of a pen." Billionaire Citadel founder Ken Griffin and JPMorgan Chase CEO Jamie Dimon are two other financial luminaries who are very skeptical of this new type of currency as well. 

Not every big investor is diving into crypto.

For every prominent manager to embrace bitcoin and crypto-related investments, like Steve Cohen's Point72 and Brevan Howard, there's a big name on the other side with harsh and skeptical remarks about the space.

Elliott Management, the $48 billion manager founded by famed activist Paul Singer, falls into the latter category —  predicting on Tuesday that cryptos will be crushed when the Federal Reserve comes out with its own "electronic dollar."

"The whole space kind of infringes on the domain that has traditionally been the space of the sovereign," said Jonathan Pollock, the co-CIO and co-CEO of Elliott, at Bloomberg's Invest Global summit Tuesday. "It's hard for us to invest something that could effectively be regulated out of existence with a stroke of a pen," he said.

An icon in the shape of a lightning bolt.

Indeed, the Chinese government has already banned crypto transactions, and Pollock expects the Federal Reserve to create a cryptocurrency linked to the US dollar — "an electronic dollar" — that will devalue bitcoin and ethereum.

The Federal Reserve since 2020 has been exploring plans for a digital dollar as more Americans move away from cash. The central bank has not yet committed to launching a digital currency, however, and last month Fed Chair Jerome Powell told Congress that it would be "ideal" if Congress were to make the final call. 

Elliott's Pollack said he appreciates what blockchain technology can do and expects it to be widespread across different industries soon enough. But he is concerned investors in the space are not fully accounting for government interference.

Pollack's comments were not as harsh as some by Elliott's founder Singer, who told  investors earlier this year that he was exasperated by bitcoin and its investors. 

"Deep breathing exercises can work, but only for short periods. We continue to press on for the day when we can say, 'We told you so,'" he wrote. 

On Monday, billionaire Citadel founder Ken Griffin, whose flagship fund had a strong September, called crypto a "jihadist call" against the country in a conversation at the Economic Club of Chicago. 

"What a crazy concept this is, that we as a country embrace so many bright, young, talented people to come up with a replacement for our reserve currency," he said. 

JPMorgan Chase CEO Jamie Dimon had a similar take on the crypto space in an interview over the weekend, telling Axios that "regulators are going to regulate the hell out of it."

"I think it's a little bit of fool's gold," Dimon said. 

An icon in the shape of a lightning bolt.

Originally posted on Business Insider.

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