Jonathan Pollock explains why Elliott stays out of crypto

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Elliott Management is avoiding crypto due to regulatory fears, according to co-CIO and co-CEO Jonathan Pollock. The executive believes the Fed will create its own “electronic dollar” that will devalue bitcoin. His skeptical comments follow similar sentiments from Ken Griffin of Citadel and Jamie Dimon of JPMorgan Chase.

Not all big investors are getting into crypto.

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

Elliott Management, the $ 48 billion manager founded by famous activist Paul Singer, falls into the latter category, predicting on Tuesday that cryptos will be crushed when the Federal Reserve releases its own “electronic dollar.”

“All of the space is encroaching in some way on the realm that has traditionally been the sovereign’s space,” said Jonathan Pollock, co-CIO and co-CEO of Elliott, at Bloomberg’s Invest Global summit on Tuesday. “It is difficult for us to invest in something that could actually be deleted with the stroke of a pen,” he said.

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

Since 2020, the Federal Reserve has been exploring plans for a digital dollar as more Americans move away from cash. However, the central bank has yet to commit to launching a digital currency, and last month Fed Chairman Jerome Powell told Congress it would be “ideal” if Congress proceeded with the final call.

Elliott’s Pollack said he appreciates what blockchain technology can do and expects it to be widespread in different industries soon enough. But he fears that investors in the space are not taking full account of government interference.

Pollack’s comments were not as harsh as those from Elliott founder Singer, who told investors earlier this year he was enraged by Bitcoin and its investors.

“Deep breathing exercises can work, but only for short periods of time. We continue to insist on the day when we can say, ‘We told you so,’” he wrote.

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

“What a crazy concept it is that we, as a country, welcome so many bright, young and talented people to find a replacement for our reserve currency,” he said.

JPMorgan Chase CEO Jamie Dimon took a similar view of the crypto space in an interview over the weekend, telling Axios that “regulators are going to regulate hell.”

“I think it’s a bit of crazy gold,” Dimon said.

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