President Trump’s return to power and adoption of virtual currency are praised by many. Bitcoin‘Bitcoin hit new highs earlier this year, and Nobel Prize-winning economist Paul Krugman says American leaders are also to blame for Bitcoin’s recent decline.
In this week’s Substack article titled “The Trump Trade Is Unraveling,” Krugman said: has long been criticized major cryptocurrencies, I wrote President Donald Trump’s plummeting poll numbers are having a negative impact bitcoin price.
This is because President Trump campaigned on supporting the digital asset industry. Therefore, Krugman argued that a leader whose popularity is declining will affect the price of Bitcoin.
“Trump’s power has visibly waned, and the price of Bitcoin, which is effectively a bet on Trumpism, has plummeted,” Krugman’s paper said. “Why is Bitcoin Trump’s trade? One reason is that President Trump’s family has effectively taken massive bribes from the crypto industry and rewarded that investment with pro-crypto policies.”
“A weakened President Trump is no longer able to enforce his will on all fronts, including his efforts to promote cryptocurrencies,” he added.
The “Trump trade” refers to how traders bought major cryptocurrencies spurred by President Trump’s election victory and policy moves. The price of Bitcoin skyrocketed on the eve of President Trump’s victory and skyrocketed after he took office.
President Trump campaigned on a ticket to support bigwigs in the digital assets and crypto industries donated To the Trump camp. His sons also have a number of profitable, albeit controversial, businesses related to digital assets.
Even the president debuted his own Solana-based meme coin, President Trump officialdays before he entered the White House.
But 2025 will not be plain sailing for Bitcoin and other digital coins and tokens, even though Republicans signed the Cryptocurrency Advancement Act. Record liquidation amount of $19 billion October 10, following threats against China.
Bitcoin’s price recently hit nearly $90,348, after falling nearly 30% since hitting an all-time high of $126,080 in October, according to CoinGecko. Experts say the asset may be entering a bear market, but it has bounced back since falling to a seven-month low of nearly $81,000 last week.
A prediction market operated by Myriad users — decryptionDastan, the parent company of Bitcoin, is optimistic that Bitcoin’s next stop is more likely to be a rally to $100,000 than a plunge to $69,000, with higher options at over 70% chance as of this writing.
Krugman went on to argue that Bitcoin has not found a use case and is instead performing similar to more volatile tech stocks.
“What is Bitcoin good for?” he wrote. “It’s not money; it’s not a medium of exchange that can be used to make payments; it’s not a hedge against inflation.”
