Paradigm Capital and Sequoia Capital is investing $1.15 billion into Citadel Securities valuing the company at $22 billion. Citadel Securities is a behemoth within the space of electronic trading. They are fundamental to Robinhood’s success as they assist in market making.
Paradigm Capital is one of the new venture capital funds on the marketplace with a keen focus on Web3 and cryptocurrency investments. It was co-founded by Fred Ehrsam who is also a co-founder of Coinbase and Matt Huang, who previously worked at Sequoia handling crypto investments.
Ken Griffin who is chairman of Citadel securities has created a company that now handles approximately 27% of the shares traded in the U.S stock market each day. It’s an amazing feat given the fact that his parent company Citadel has started 2 decades ago in 2002.
An interesting thought experiment to think about is whether Ken Griffin finally wants a piece of the crypto pie after staying away from this space for so long.
Given the fact that he handles the market making, he has all the data available. This will allow him to see that it can be a very profitable industry if he was to dip his toes inside.
Robinhood, which is an electronic trading company has tumbled 80% since its peak. It was basically a pandemic stock and as the stimulus checks dried up from Uncle Sam, it will be interesting to see how it “hodls”.
Citadel Securities is probably working on its own platform to get in on the action and become a competitor for Robinhood and other exchanges.
