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‘Headed for oblivion’: Economist Paul Krugman warns of ‘collapse of crypto institutions’ after FTX debacle
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‘Headed for oblivion’: Economist Paul Krugman warns of ‘collapse of crypto institutions’ after FTX debacle
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Right-wing libertarians and socially conservative MAGA Republicans disagree about many things, but one thing they do have in common is an affection for cryptocurrencies. It isn’t hard to find people on the right who are unapologetically bullish on cryptocurrencies.
But one person who doesn’t share their enthusiasm is liberal economist and New York Times columnist Paul Krugman. In his November 17 column, Krugman lays out some reasons why he believes there is a “strong case” that the cryptocurrency industry is “headed for oblivion.”
“Crypto reached its peak of public prominence last year, when Matt Damon’s ‘Fortune favors the brave’ commercial — sponsored by the Singapore-based exchange Crypto.com — first aired,” Krugman explains. “At the time, Bitcoin, the most famous cryptocurrency, was selling for more than $60,000. Bitcoin is now trading below $17,000. So, people who bought after watching the Damon ad have lost more than 70 percent of their investment. In fact, since most people who bought Bitcoin did so when its price was high, most investors in the currency — around three-quarters of them, according to a new analysis by the Bank for International Settlements — have lost money so far.”
READ MORE: Crypto: 46,000 people lost $1 billion to cons in 15 months
Krugman notes that “falling prices” don’t necessarily “mean that cryptocurrencies are doomed,” pointing out that “people who bought stock in” Facebook’s parent company Meta “at its peak last year have lost around as much as investors in Bitcoin have.” But when cryptocurrency exchanges themselves are in trouble, Krugman warns, it is a bad sign.
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