Paul Krugman Startled By Massive Crypto Spending In Current Election Cycle, Questions Industry's Worth: 'Destroys Value Rather Than Creates It'

Nobel laureate and esteemed economist Paul Krugman has voiced his concern over the substantial political expenditure by the cryptocurrency industry in the ongoing election cycle.

What Happened: In an opinion piece for the New York Times, Krugman drew attention to the disproportionate influence of the industry on campaign finance, despite presenting no “significant use cases” as yet.

“The gigantic political spending and influence of an industry that, if anything, destroys value rather than creates it (especially if you consider its environmental effects) is startling,” Krugman stated.

Indeed, corporations linked to cryptocurrencies have poured an unprecedented $119 million to the 2024 presidential election, making up nearly half of the total corporate spending. Major companies like Coinbase and Ripple have channeled most of these funds into super political action committees (PAC) that promote pro-cryptocurrency candidates.

The 2008 Nobel Economics Prize winner admitted it’s natural for industries to donate money to influence policies in their favor. Cryptocurrency, however, shouldn’t be thought of as a “real” industry, he argued.

“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 Uptake Hasn’t Been A ‘Resounding Success’ — ‘We Have Never Forced Anyone To Adopt It’

Why It Matters: This is not the first time Krugman has criticized the cryptocurrency industry. In July, he slammed presidential hopeful Donald Trump’s support for Bitcoin BTC/USD, calling it a “government bailout” of a scandal-ridden industry. He also criticized the Republican Party’s ongoing embrace of cryptocurrencies.

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

Price Action: At the time of writing, Bitcoin was trading at $57,480.77, down 1.39% in the last 24 hours, according to data from Benzinga Pro. 

Did You Know? 

• Congress Is Making Huge Investments. Get Tips On What They Bought And Sold Ahead Of The 2024 Election With Our Easy-to-Use Tool

Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.