Original author: Fairy, ChainCatcher
Original editor: TB, ChainCatcher
Early this morning, Bloomberg reported that Citadel Securities, one of the worlds largest market makers, plans to enter the cryptocurrency market and is seeking to join the market maker list of multiple exchanges. As soon as the news came out, it attracted widespread attention and discussion in the market. As a top player in the global financial market, how will Citadel Securities entry change the landscape of the crypto market? What opportunities and challenges will it bring?
This article will use the format of ten questions and ten answers to explore in depth the significance and potential impact of Citadel Securities’ entry into the field of cryptocurrency market making.
Q1. Who is Citadel Securities?
Citadel is currently the hottest player in the global financial market. It started as a small hedge fund and after years of development, it has gradually grown into one of the most profitable investment companies in the history of the financial industry.
Citadel consists of Citadel LLC and Citadel Securities, of which Citadel Securities is a global market maker and Citadel LLC is a multinational hedge fund financial services company.
As a core participant in the U.S. stock market, Citadel Securities has become the worlds largest stock buyer and seller, accounting for nearly a quarter of the U.S. stock markets trading share, involving more than 11,000 U.S.-listed securities and more than 16,000 over-the-counter securities. In August 2024, its stock trading volume even surpassed the New York Stock Exchange.
On April 9, 2024, Citadel Securities was successfully selected into the 2024 Hurun Global Unicorn List with a corporate valuation of RMB 155 billion, ranking 13th, becoming a giant that cannot be ignored in the global financial technology field.
Q2.What is the background of the Citadel Securities team?
Citadel Securities was founded by legendary investor Ken Griffin and is currently headed by Zhao Peng as CEO. Zhao Peng was born in Beijing and is known as one of the top Chinese people on Wall Street. He was admitted to the Department of Mathematics at Peking University at the age of 14, and then received a doctorate from the University of California, Berkeley. After joining Citadel Securities, it took him less than 10 years to move from analyst to partner, general manager, and finally CEO.
Citadel Securities has a highly professional and international team with a total of approximately 1,600 employees worldwide. 45% of the team members have advanced degrees, and there are approximately 260 doctoral students. Their research fields cover more than 40 disciplines, including applied mathematics, computer engineering, bioinformatics, and geophysics. The team members come from approximately 80 countries, reflecting its global layout and multicultural background.
Q3.What was Citadel Securities’ attitude towards cryptocurrencies in the past?
In the past, Citadel Securities has been cautious about digital assets and has avoided getting involved in retail-oriented crypto platforms due to the uncertainty of the U.S. regulatory environment.
Founder Ken Griffin was once a Bitcoin skeptic. Before the collapse of Terra in 2022, Griffin said Citadel may enter the crypto industry in the next few months. However, the Terra incident and the market crash may have dampened his confidence in the crypto market, and Citadel ultimately did not take action.
In recent months, Griffin has acknowledged missing out on early opportunities in the crypto market, and revealed at the UBS Finance 2025 conference that the company was considering entering the crypto market and acting as a market maker.
Q4.Why is Citadel Securities so powerful?
The key to Citadel Securities success lies in its control of order flow and its deep mining and application of large amounts of data. The company processes up to $450 billion worth of trading information every day and makes decisions through complex predictive analysis and valuation.
Citadel Securities can accurately assess the fair value of stocks and options in different market environments. According to insiders, Citadel invests hundreds of millions of dollars in hard technology and quantitative research each year.
Q 5. Does Citadel Securities have any well-known operations?
One of the companys most notable events was the GameStop short squeeze in 2021. Retail investors united to go long on GameStop stock and successfully crushed the hedge funds that shorted the stock, causing the hedge fund Melvin Capital to suffer huge losses and go bankrupt.
Investigations have shown that most of Robinhoods orders went to Citadel Securities during this process. However, Citadel LLCs funds are partners of Melvin Capital and injected $2 billion into the crisis. This dual role as both a market maker and an investor has caused controversy in the market.
Citadel Securities traded 7.4 billion shares a day during the most intense days of the short squeeze battle, exceeding the industrys daily average in 2019.
Q 6.What does Citadel Securities’ entry mean for the crypto market?
The community is divided into two camps on Citadel Securities entry into the crypto market. One camp believes that this is a positive, but more people tend to be bearish.
Pros:
Improve market liquidity: As a leading global market maker, Citadel Securities’ entry can improve the liquidity of the crypto market.
Attract more investors: As a well-known financial institution, Citadel’s participation will help attract more investors, especially institutional investors, into the crypto market, further driving capital inflows.
Regulation and Compliance: Citadel’s operations in traditional markets are often subject to strict compliance and regulatory requirements. Citadel’s compliance background will accelerate the integration of the crypto market with the traditional financial regulatory system, which may lead to higher KYC/AML requirements for exchanges and projects.
Negative:
Potentially exacerbated market manipulation: Citadel Securities has been controversial for its short-selling operations in traditional markets. Community users are concerned that as a large market maker, its strong market control may exacerbate the risk of manipulation in the crypto market.
Market transparency: Community members reported that Citadel’s short positions were not fully disclosed, that the 13F filings only showed long-term holdings, and that its market-making short sales were typically daily operations rather than long-term bets.
Increased industry concentration: The entry of Citadel Securities may lead to further concentration of market resources in a few large institutions, and increase industry concentration. This may make the market more standardized and efficient, but it may also weaken the competitiveness of small and medium-sized participants.
Q 7.What strategy does Citadel Securities adopt in the crypto market?
Citadel Securities plans to join the market maker list of several major crypto exchanges, including Coinbase Global Inc., Binance Holdings and Crypto.com. Once approved by the relevant exchanges, Citadel Securities plans to first establish a market making team outside the United States.
The company’s ultimate push and interest in the crypto market could be influenced by what new regulations emerge in the coming months.
Q 8. What is Citadel’s current involvement in the crypto market?
In 2023, Citadel Securities quietly entered the crypto market through EDX Markets. EDX Markets is a crypto exchange jointly launched by Citadel Securities, Charles Schwab, and Fidelity Investments, which is only for institutional investors.
EDX Markets uses traditional market structures to process crypto transactions, providing institutional investors with a familiar execution and settlement model.
Q 9. How will Citadel Securities’ entry change the crypto market landscape?
It will be more difficult for retail investors to make profits, and the grassroots approach of retail investors may be further squeezed out. Market opportunities and resources will be more concentrated in large institutions and high-net-worth investors, and the disadvantages of retail investors in information, technology and funds will become more obvious, making it much more difficult for them to make profits.
Small and medium-sized market makers are facing increasing pressure to survive. Citadel Securities will put tremendous pressure on existing small and medium-sized market makers. With its huge capital scale, advanced algorithmic trading system and global resource network, it is likely to dominate liquidity provision and transaction execution efficiency. Many small and medium-sized market makers may be forced to exit the market because they cannot compete with it.
In addition, the entry of Citadel Securities may also trigger a reallocation of funds from non-market maker institutions.
Q1 0.Why did Citadel Securities join the crypto market later than its competitors?
Unlike competitors such as Jane Street and Jump Crypto, Citadel Securities previously kept its distance from crypto assets. However, as regulatory pressure intensified in 2023, companies such as Jane Street and Jump scaled back their presence in the U.S. crypto market, providing Citadel Securities with an opportunity to fill the gap in the market.
Citadel’s delay in entering the crypto market may be due to market structure and regulatory risks. Its recent expansion of crypto business also reflects its adaptation to the changing US regulatory environment.
