An economist criticized Trump's crypto plan
Renowned economist Paul Krugman remains a staunch critic of Bitcoin, expressing his growing irritation with the recent enthusiasm for the cryptocurrency among Republicans.
In a recent New York Times article, Krugman criticized Donald Trump's vice-presidential choice, JD Vance, painting him as the embodiment of the "paranoid" mindset prevalent among Silicon Valley's "tech elites," who share his penchant for digital currencies.
He conceded that the digital currency's only practical uses might be for laundering money and facilitating ransom demands.
Public records reveal Vance as a staunch advocate for cryptocurrency, having reported ownership of Bitcoin valued between $100,000 and $250,000 in 2022—a stake that would have grown substantially if maintained. In June, he was reported by Politico to have proposed legislation aimed at making crypto regulation more favorable to the industry.
Moving into the election season, the wider Republican faction, including Trump himself, has openly embraced a pro-crypto stance. At the Bitcoin 2024 conference in Nashville, Trump hinted that Bitcoin could eventually outpace gold in value and pledged to create a "strategic Bitcoin reserve" if he were re-elected.
Moreover, the politician echoed a favorite assertion among Bitcoin enthusiasts: that excessive government expenditure and the printing of money are driving severe inflation and posing a "danger to the dollar."
However, Krugman, a proponent of the Keynesian economic theory which supports government expenditure and active fiscal policy for economic growth, finds little value in cryptocurrency beyond its capacity to evade regulatory oversight, dismissing it as "essentially a Ponzi scheme" with no real protection against inflation.
Krugman is now openly critical of Trump's newfound support for cryptocurrency, noting the irony given the President's previously negative stance on digital currencies, mirroring Krugman's views. He lambasted Trump's proposal for a Bitcoin reserve as "a government bailout for a scandal-plagued, environmentally harmful industry."
He also ridiculed the Republican Party's 2024 pledge to halt the Democrats' "illegal and un-American crackdown on cryptocurrency," commenting skeptically on whether many voters would understand or care about the issue.
Conversely, the Democratic Party shows signs of concern for not engaging sufficiently with the crypto sector, acknowledging the potential influence of digital asset investors on electoral outcomes.
