Crypto collapse could lead to an endless winter, says Nobel laureate Paul Krugman

The collapse of FTX could lead to the end of the industry, according to a Nobel laureate and noted economist Paul Krugman.

Krugman wrote in the New York Times that the industry could be headed for an endless winter as most digital assets fail to prove their real-life value.

Many people say we are going through a crypto winter. That may understate the case. This is looking more and more like the Fimbulwinter, the endless winter that precedes the end of the world in Norse mythology, not just the idea of organizing economic life around the famous 'blockchain', said Krugman.

He noted that many companies are not willing to embrace the nascent technology because of the fact that they have yet to prove their utility.

It canceled the plan two weeks ago, writing off $168 million in losses. The original rationale for the BTCUSD was that it would do away with the need for trust. Banks rarely steal their customers' assets, while cryptocurrencies institutions are more susceptible to the temptation, he added.

In a month, Krugman expressed optimism about efforts to lower inflation, saying that a soft landing looks increasingly plausible.

Core inflation for October was only 3.6% annualized, according to a good inflation report. The monthly data is still 6% over the past three months. The lagging indicator for shelter accounts is Krugman, and it's a lagging indicator.