The diminishing popularity of U.S. President Donald Trump is adversely affecting the leading cryptocurrency, according to Nobel laureate and digital asset critic Paul Krugman. He stated this in a Substack publication.
“Bitcoin’s price soared after Trump’s victory last year, and its recent decline coincided with a series of his political setbacks,” he wrote.
A Tool for Financial Predators
The politician made digital assets a key point of his election campaign, promising to support the industry and turn the United States into the world’s “crypto capital.”
Under Trump, regulators’ attitudes towards cryptocurrencies indeed shifted. The SEC was headed by a Bitcoin advocate who prioritized creating transparent and understandable rules for the digital asset market.
The commission dropped claims against several crypto projects, including Ripple, with the parties settling a five-year-long conflict in August.
The U.S. President also signed the GENIUS Act, establishing rules for stablecoins, and pardoned Silk Road creator Ross Ulbricht and Binance founder Changpeng Zhao.
A key event was Donald Trump and his family’s direct involvement in the digital asset sector: World Liberty Financial, meme coins TRUMP and MELANIA, mining company American Bitcoin, and others.
Earlier, a Financial Times investigation revealed that the Trumps earned over $1 billion from cryptocurrency projects.
“Why has Bitcoin become a bet on Trump? Partly because Trump, whose family received massive bribes from crypto industry participants, rewarded these investments with pro-cryptocurrency policies,” Krugman emphasized.
He noted that digital assets are becoming “a tool for financial predators, and the Trump administration is extremely favorable to them.”
Electoral Defeat
Krugman described the recent Bitcoin crash as “a reversal of the Trump bet.” He stated that the U.S. President still seeks to support the industry that profited his circle and to provide favorable conditions for “financial predators.” However, the influence of the White House leader is gradually waning, the expert noted.
“Since spring, Trump has received very low ratings in polls, with his net approval rating significantly dropping over the past month. Although he claims to have the highest ratings of his political career, no one knows which poll, if any, he refers to,” he added.
The politician’s net rating is currently -19%: 38% approve of his activities, 57% disapprove, and 4% are undecided.
All this has reduced Republican congressmen’s readiness to unconditionally support the president. Simultaneously, doubts among Trump’s supporters have grown due to escalating scandals over his possible ties with Jeffrey Epstein.
“Is it a stretch to link Trump’s political troubles with cryptocurrency prices? No. As Josh Marshall often emphasizes, power is unified. A weakened Trump is less able to impose his will on all fronts, including his efforts to promote digital assets,” Krugman wrote.
In conclusion, he stressed that the falling Bitcoin price is an indicator of the U.S. President’s declining dominance over the Republican Party.
At the time of writing, the leading cryptocurrency is trading around $91,600. Over the past day, the asset has gained 5%, recovering from local lows around $80,000.
Previously, Cardano founder Charles Hoskinson expressed disappointment in Trump’s impact on the crypto market, stating that the president’s administration was “somewhat useless” for the industry.