Paul Krugman, surprised by massive spending on cryptocurrencies in the current election cycle, questions the value of the industry: “It destroys value instead of creating it”

Nobel Prize winner and prestigious economist Paul Krugman has expressed concern about the cryptocurrency industry's significant political spending in the current election cycle.

What happened:In an opinion piece For the New York Times, Krugman called attention to the industry’s disproportionate influence on campaign finance, even though it has yet to present “significant use cases.”

“The massive political spending and influence of an industry that, if anything, destroys value rather than creates it (especially given its environmental impacts) is astonishing,” Krugman said.

In fact, cryptocurrency-linked corporations have invested an unprecedented $119 million in the 2024 presidential election, accounting for nearly half of total corporate spending. Large companies like Coinbase and Vibe They have funneled most of these funds into super political action committees (PACs) that promote pro-cryptocurrency candidates.

The 2008 Nobel Prize winner in economics admitted that it is natural for industries to donate money to influence policies in their favor. However, he argued that cryptocurrencies should not be thought of as a “real” industry.

“We don’t know what will happen if the government gets serious about regulating cryptocurrencies, policing both their criminal uses and their marketing practices. But much, if not all, of that $2 trillion valuation could simply evaporate,” Krugman added.

See also: El Salvador President Nayib Bukele says Bitcoin adoption has not been a “resounding success”: “We have never forced anyone to adopt it”

Why is it important?:This is not the first time Krugman has criticized the cryptocurrency industry. In July, he harshly criticized presidential candidate From Donald Trump support for Bitcoin BTC/USDcalling it a “government bailout” of a scandal-plagued industry. He also criticized the Republican Party’s continued embrace of cryptocurrencies.

Krugman has ridiculed Bitcoin's store of value narrative, comparing it to the volatile moves of tech stocks rather than gold.

Price actionAt the time of writing, Bitcoin was trading at $57,480.77, down 1.39% over the past 24 hours, according to Data from Benzinga Pro.

Did you know?

Disclaimer: This content was produced in part with the assistance of Benzinga Neuro and was reviewed and published by Benzinga editors.