TLDR
- Economist Paul Krugman criticized Donald Trump and J.D. Vance for supporting Bitcoin
- Krugman called Bitcoin “economically useless” except for money laundering and extortion
- Trump suggested creating a “strategic Bitcoin stockpile” if elected president
- The Republican Party has become more pro-crypto heading into the 2024 election
- Some Democrats are urging their party to take a “forward-looking approach” to digital assets
Nobel Prize-winning economist Paul Krugman has voiced strong criticism of Republican politicians’ recent embrace of Bitcoin and cryptocurrency.
In a New York Times article published on Monday, Krugman took aim at former President Donald Trump and his newly announced running mate, Senator J.D. Vance of Ohio, for their pro-Bitcoin stances.
Krugman described Bitcoin, which was introduced 15 years ago, as “economically useless.” He stated that the main exceptions to this uselessness are “money laundering and extortion.”
This view stands in stark contrast to the growing support for cryptocurrency among Republican politicians.
Senator Vance, who Trump selected as his vice presidential candidate for the 2024 election, has been open about his interest in cryptocurrency.
In 2022, Vance reported owning between $100,000 and $250,000 worth of Bitcoin. More recently, he has been working on draft legislation aimed at creating a more industry-friendly regulatory environment for cryptocurrencies.
Trump himself has made a significant shift in his stance on Bitcoin. At the Bitcoin 2024 conference in Nashville, the former president suggested that Bitcoin’s value might one day surpass that of gold.
He also promised to establish a “strategic Bitcoin stockpile” if elected president. This marks a notable change from his previous skepticism towards cryptocurrencies.
Krugman expressed skepticism about Trump’s new pro-crypto position, calling the proposed Bitcoin stockpile “a government bailout for a scandal-ridden, value- and environment-destroying industry.”
He also mocked the Republican Party’s promise to “end Democrats’ unlawful and un-American crypto crackdown,” suggesting that most voters are unfamiliar with these issues.
The economist’s criticism extends beyond individual politicians to the broader Republican embrace of cryptocurrency.
The party has made supporting the crypto industry a part of its 2024 agenda, reflecting a growing alignment between conservative politics and the digital asset sector.
However, the focus on cryptocurrency is not limited to Republicans. Some Democrats are concerned that their party is not engaging enough with the crypto industry.
A group of two dozen Democrats recently sent a letter to the Democratic National Committee, urging them to take a “forward-looking approach to digital assets and blockchain technology.” They argued that these technologies could have a significant impact on election outcomes.
Krugman, known for his Keynesian economic views, has long been skeptical of cryptocurrency. He sees little utility in crypto beyond evading regulations and has described it as “largely a Ponzi scheme” that doesn’t effectively hedge against inflation.
