In a recent New York Times article, economist Paul Krugman expressed strong opposition to the growing Republican support for Bitcoin, specifically targeting Donald Trump and his VP pick, JD Vance. Krugman characterized the enthusiasm for cryptocurrencies as indicative of a misguided alignment with “paranoid” Silicon Valley figures, arguing that Bitcoin remains “economically useless” despite being introduced 15 years ago.
Krugman highlighted that the primary utility of Bitcoin appears to be in facilitating illicit activities such as money laundering and extortion. He criticized Vance for his pro-crypto stance, noting that Vance disclosed ownership of Bitcoin valued between $100,000 and $250,000, which may have appreciated significantly. Vance is also reportedly drafting legislation aimed at creating a more favorable regulatory environment for the crypto industry.😡
Trump's recent comments at the Bitcoin 2024 conference, where he suggested that Bitcoin could surpass gold in value and proposed a "strategic Bitcoin stockpile," further fueled Krugman's skepticism. The economist views these statements as a potential government bailout for an industry he describes as “value-destroying” and environmentally harmful.
Krugman, rooted in Keynesian economics, advocates for active government spending and monetary policy management to stimulate economic growth. He dismissed the notion that cryptocurrencies serve as a hedge against inflation, instead labeling them as a “Ponzi scheme” that largely evades regulation.
In addition, Krugman ridiculed the Republican Party's claims to end what they describe as an "unlawful and un-American crypto crackdown," suggesting that such rhetoric resonates with only a minimal segment of the electorate. Meanwhile, Democrats are increasingly aware of their need to engage with the crypto community, recognizing its potential as a significant voting bloc in upcoming elections.
