Why Is Bitcoin Down? Blame Trump, Says Economist Paul Krugman

President Trump’s return to office and embrace of cryptocurrency was credited by many for Bitcoin‘s surge to new highs earlier this year—and according to Nobel Prize-winning economist Paul Krugman, the American leader deserves the blame for Bitcoin’s recent decline, too.

In a Substack piece this week entitled “The Trump Trade is Unraveling,” Krugman, who has long criticized the leading cryptocurrency, wrote that President Donald Trump’s plunging polling numbers are having a negative effect on Bitcoin’s price.

This is because President Trump campaigned on helping the digital asset industry; a leader who is declining in popularity will therefore impact the price of Bitcoin, argued Krugman. 

“Trump’s power is visibly diminishing, so the price of Bitcoin, which has in effect become a bet on Trumpism, has plunged,” Krugman’s piece read. “Why is Bitcoin a Trump trade? Partly because Trump, whose family has in effect received massive bribes from the crypto industry, has been rewarding that investment with pro-crypto policies.”

He added: “A weakened Trump is less able to work his will on all fronts, including his efforts to promote crypto.”

The “Trump trade” refers to how traders have bought the leading cryptocurrency spurred on by President Trump’s election win and policy moves. Bitcoin’s price soared on the eve of President Trump’s victory, and boomed following his inauguration.

President Trump campaigned on a ticket to help to help the digital asset space, and crypto industry bigwigs donated to Trump’s campaign. His sons have, albeit controversially, also made money with a number of digital asset-related ventures. 

The president even debuted his own  Solana-based meme coin, Official Trump, just days before he entered the White House. 

But 2025 hasn’t been all smooth sailing for Bitcoin and other digital coins and tokens—especially recently—despite the Republican signing pro-crypto laws: The space has suffered more volatility due to the president’s trade war, including a record $19 billion in liquidations on October 10 following a threat made against China.

Bitcoin was recently priced at nearly $90,348, according to CoinGecko, after dropping nearly 30% since it notched a new all-time high of $126,080 in October. Experts are now saying the asset could be entering a bear market, though it has regained ground since falling to a seven-month low of nearly $81,000 last week.

Users on Myriad—a prediction market operated by Decrypt‘s parent company, Dastan—remain optimistic that Bitcoin’s next stop is more likely to be a rise to $100,000 than a plunge to $69,000, giving the higher option a more than 70% likelihood as of this writing.

Krugman went on to argue that Bitcoin has failed to find use cases, instead performing much like a more volatile tech stock. 

“What is Bitcoin good for?” he wrote. “It isn’t money—that is, it isn’t a medium of exchange, something you can use to make payments. It isn’t a hedge against inflation.”