Friday, January 27, 2023

Economist Paul Krugman Calls Bitcoin Fans “Nasty as Well as Crazy”

Economist Paul Krugman Calls Bitcoin Fans “Nasty as Well as Crazy”

Nobel Prize-winning economist Paul Krugman is back at it again, this time calling Bitcoiners “cultists” and saying he’s “happy watching the Bitcoin etc bubble deflate.” It’s a definite kick to the space while the cryptoeconomy is down. But will Krugman eat crow if the bitcoin price surges again in the coming weeks?

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Krugman: “Faith in Techno-Magic”

Krugman made headlines just days ago in partaking in a tweetstorm that bashed cryptocurrencies in general in the strongest possible terms. Unsurprisingly, then, Krugman’s just one-upped his previous display with a new Twitter rant.

Krugman pictured.

This time, the outspoken economist confidently hailed the current acute bitcoin price downturn as the end of the popularly-billed “Bitcoin Bubble”

Specifically, Krugman noted that he felt what he dubbed “cryptofreude” — a reference to the word “schadenfreude,” which can be defined as “pleasure derived by someone from another person’s misfortune.”

Laying on the salt, then, the Nobel Prize-winning economist bashed Bitcoin fans as being “crazy” and akin to cultists:

It’s clear, then, that supporters of digital assets won’t be able to make Krugman see the “light of day” when it comes to cryptocurrencies, especially bitcoin, any time soon.

Wait, Bubbles Don’t End Suddenly?

Krugman’s most curious comment from his recent tweetstorm is that, in his view, economic bubbles don’t necessarily end “cleanly and suddenly.”

One might be tempted to take his word for it, since he is a Nobel laureate after all. But does such an assertion really add up? Not according to Troy University economics professor Malavika Nair.

Nair pictured.

In 2017, Nair made waves in the cryptoverse after she asserted that bitcoin’s price performance wasn’t behaving like an economic bubble. “Whatever it is, it’s definitely not a bubble,” Nair commented at the time.

Why? Because, per Nair, traditional bubbles behave somewhat like fireworks: they “burst” at the first and only peak of their speculative frenzy.

Consider the oft-touted Tulip mania from hundreds of years ago, which the Bitcoin craze is often likened to. What’s the glaring difference between the former and the latter? That tulip prices during the mania didn’t retrace down only to surge to new heights consistently. Bitcoin has done just that and then some — numerous times.

So, to Nair, bitcoin isn’t like any true bubble she’s ever seen. It’s something else entirely — a new cryptoeconomic phenomenon, seemingly. And that’s a line of thinking Paul Krugman still clearly hasn’t come around to seeing just yet.

What’s your take? Is Krugman just being salty? Does he fundamentally misunderstand cryptoeconomics? Sound off in the comments below.

Images via Wikipedia, Business Insider,

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