Paul Krugman
Paul Krugman, the Nobel prize-winning economist and New York Times columnist, is one of the most recognized faces in economics. He has also never really been a fan of crypto. In 2018, he wrote in his column before speaking at a conference on blockchain that his main problem with crypto was it did not act like any good currency should.
He cited the high costs of doing business (such as gas fees and time it takes to complete a transaction) compared to the trend of quicker and more seamless buying with credit cards and online accounts. The other issue was that crypto could not be connected or backed up by any government or physical asset, instead depending on “self-fulfilling expectations” which lead to grift and might ultimately result in a total crash.
Lately, Krugman has called crypto “the new subprime” referring to the subprime mortgage crisis of the early 2000s, when banks knowingly gave high risk loans out when interest rates were low and house prices were out of control. He feared that investors in crypto were being sold a false bill of goods, unaware of the risks involved. After the most-recent crypto crash, Krugman wrote the crypto bubble had long been wavering. Compared with rising inflation and the cost of living, crypto was inflating at astronomical rates. He was most concerned by people who bought into crypto recently, influenced by the hype and celebrity endorsements.
