Bitcoin's "Digital Gold" Narrative Falters as Krugman Pokes Fun at Its Volatility
Nobel laureate and renowned economist Paul Krugman has once again taken aim at Bitcoin, questioning its long-held narrative as a "digital gold" store of value. His comments come after the cryptocurrency experienced one of its steepest drops in recent years.
Krugman's critique stems from a tweet by financial journalist Joe Weisenthal, who compared Bitcoin's recent performance to that of three tech stocks bundled together. This highlights the growing correlation between Bitcoin and traditional risk assets, particularly technology stocks, which contradicts its supposed role as a safe haven asset.
Krugman further emphasizes this point by comparing Bitcoin's volatility to that of NVIDIA Corp., a leading tech stock often seen as a barometer of sentiment in the technology sector. He quips, "But if you think about it, it's an Nvidious comparison," playing on the word "envious" to underscore the irony of Bitcoin's instability.
This is not the first time Krugman has expressed skepticism towards Bitcoin. He previously described it as "economically useless" and criticized former President Donald Trump's support for the asset class. Notably, Trump recently advocated for a national Bitcoin stockpile, a move Krugman labeled a "government bailout" of an industry riddled with scandals and environmental concerns.
Krugman's latest comments come amidst a broader market downturn for cryptocurrencies, raising questions about the validity of Bitcoin's store of value narrative. As of this writing, Bitcoin is trading at $55,791.75, up 2.55% in the last 24 hours, but its future trajectory remains uncertain.