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Paul Krugman: The reason for the collapse of the crypto market was the weakening of Trump's power.
Nobel Prize winner in Economics Paul Krugman states in his blog on Substack that the recent collapse of Bitcoin is a "unraveling of the Trump deal". According to him, the crypto market has become a "bet on Trumpism": with Donald Trump's return to the White House in January 2025, Bitcoin soared to a record $126,000, thanks to the pro-crypto policies of a president who received millions from the industry through family investments. Trump promised a "strategic crypto reserve" and a relaxation of regulations that fueled the hype.
Bitcoin crash isn’t just a dip — it shows the “unraveling of the Trump trade,” says Paul Krugman
In a recent post, Krugman argues that Bitcoin’s dramatic fall from its $126,000 peak to around $87,000 reflects more than market cycles: it mirrors the fading political influence of Donald Trump, whose crypto‑friendly stance had helped hype Bitcoin. As Trump’s power wanes, the narrative that once propped up Bitcoin appears to be unraveling — and so does investor confidence.
Bitcoin plunged roughly 30 % in weeks, wiping nearly $1 trillion from global crypto‑market value.
Trump and his family reportedly held hundreds of millions in Bitcoin; their crypto‑related wealth dropped by about $1 billion in the crash.
Krugman claims Bitcoin’s surge was tied to political optimism around Trump’s crypto‑friendly policies (e.g. plans for a federal Bitcoin reserve, crypto‑investment friendly regulations).
If Bitcoin has become more of a political bet than a financial asset, then shifts in political dynamics — like declining influence of a leader — can trigger dramatic price swings. For investors, this underscores how intertwined crypto markets are with geopolitical and regulatory narratives, not just supply/demand fundamentals.
#TrumpTradeUnraveling #CryptoPolitics #PaulKrugman #BTCFall $BTC
In a recent post, Krugman argues that Bitcoin’s dramatic fall from its $126,000 peak to around $87,000 reflects more than market cycles: it mirrors the fading political influence of Donald Trump, whose crypto‑friendly stance had helped hype Bitcoin. As Trump’s power wanes, the narrative that once propped up Bitcoin appears to be unraveling — and so does investor confidence.
Bitcoin plunged roughly 30 % in weeks, wiping nearly $1 trillion from global crypto‑market value.
Trump and his family reportedly held hundreds of millions in Bitcoin; their crypto‑related wealth dropped by about $1 billion in the crash.
Krugman claims Bitcoin’s surge was tied to political optimism around Trump’s crypto‑friendly policies (e.g. plans for a federal Bitcoin reserve, crypto‑investment friendly regulations).
If Bitcoin has become more of a political bet than a financial asset, then shifts in political dynamics — like declining influence of a leader — can trigger dramatic price swings. For investors, this underscores how intertwined crypto markets are with geopolitical and regulatory narratives, not just supply/demand fundamentals.
#TrumpTradeUnraveling #CryptoPolitics #PaulKrugman #BTCFall $BTC
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