Nobel Prize-winning economist Paul Krugman harshly criticized the tech industry's support for Donald Trump and JD Vance, citing their stance on cryptocurrency.
Krugman argues that Bitcoin, which is often touted by these tech moguls, is economically useless and primarily serves illegal purposes such as money laundering and extortion.
Trump's call for a national Bitcoin reserve is tantamount to the government bailing out a scandal-ridden, environmentally damaging industry, Krugman said.
“The technocrat support for Trump and Vance also seems to have a lot to do with one particular issue: cryptocurrencies,” Krugman said. Krugman noted that in 2017, pro-Trump tech giant David Sacks praised Bitcoin for fulfilling PayPal's vision of creating a “new world currency.” Similarly, Peter Thiel's Founders Fund invested $200 million in two cryptocurrencies last year, and Vance is actively pushing for crypto-friendly legislation.
Krugman says that despite all the excitement, most people, including Trump, know very little about cryptocurrencies. Trump once called Bitcoin a “scam” but recently blamed Democrats for attacking Bitcoin.
Despite being introduced 15 years ago, Bitcoin remains largely unused for legitimate transactions outside the crypto ecosystem, according to Krugman. According to a 2022 survey, their primary use is money laundering and extortion, the economist said.
Krugman noted that crypto enthusiasts now see Trump as a key political ally. They successfully incorporated anti-regulatory stances into the Republican Party's 2024 platform, opposing a Federal Reserve Digital Currency and calling for an end to what Democrats called “un-American Crypto oppression.”
At a recent Bitcoin conference, Trump went further, advocating for a national Bitcoin reserve. Krugman criticized it as a government bailout for an industry plagued by scandals and environmental concerns.
*This is not investment advice.