Nobel Laureate Explains Bitcoin Drop by Trump’s Weakening Position
The decline in popularity of U.S. President Donald Trump is directly affecting the performance of the first cryptocurrency — Bitcoin. This view was expressed by Nobel laureate in economics and a well-known critic of digital assets, Paul Krugman.
“After Trump’s victory last year, the price of Bitcoin soared, and the recent decline coincided with a series of his political failures,” the expert noted in a Substack post. He emphasized that the crypto market now reacts not only to global economic trends but also to the status of key political figures, especially the U.S. president.
During his election campaign, Trump actively promoted digital assets, promising support for the industry and proclaiming plans to make the U.S. the “crypto capital of the world.” Under his administration, regulators’ attitude toward cryptocurrencies noticeably softened. The SEC was headed by Bitcoin supporter Paul Atkins, who prioritized creating clear and transparent rules for the digital asset market.
The SEC dropped claims against several crypto projects, including Ripple — after a five-year legal battle, the parties settled the conflict. In addition, Trump signed the GENIUS Act, which sets rules for stablecoins, and pardoned prominent figures in the crypto world — Silk Road founder Ross Ulbricht and Binance founder Changpeng Zhao.
Krugman pays particular attention to the Trump family’s direct involvement in the crypto sector: World Liberty Financial, meme coins TRUMP and MELANIA, the American Bitcoin mining company. According to Financial Times investigations, the Trump family earned over $1 billion from crypto projects.
“Why did Bitcoin become a bet on Trump? Partly because Trump, whose family received substantial ‘contributions’ from crypto industry participants, rewarded these investments with pro-crypto policies,” Krugman notes. He adds that digital assets have become a “tool of financial predators,” to which the Trump administration was highly favorable.
Political Failures and Bitcoin Decline
Krugman calls the recent Bitcoin drop a “reversal of the Trump bet.” The president continues to try to support the industry that profited his circle, but his influence is gradually weakening.
Since spring, Trump’s approval rating has significantly declined: according to recent polls, 38% approve of his actions, 57% disapprove, and 4% are undecided — a net rating of -19%. The weakening of his position is reflected in diminished support among Republican congressmen. At the same time, doubts are growing among his supporters due to scandals related to possible connections with Jeffrey Epstein.
“Is it an exaggeration to link Trump’s political troubles to cryptocurrency prices? No. A weakened Trump is less able to push his decisions on all fronts, including the promotion of digital assets,” Krugman adds.
Bitcoin as an Indicator of Political Influence
The expert concludes that the Bitcoin decline has become a kind of indicator of Trump’s reduced dominance over the Republican Party and the crypto industry. At the time of publication, Bitcoin was trading around $91,600, recovering from local lows of about $80,000 over the past 24 hours (+5%).
Hourly BTC/USDT chart, Binance. Source: TradingView
Cardano founder Charles Hoskinson expressed disappointment in Trump’s influence on the crypto market, calling the president’s administration “somewhat useless” for the industry. In his view, despite active initiatives, no systemic impact on the crypto market was achieved.
🔥 Krugman’s main takeaway is clear: cryptocurrencies remain at the center of politico-economic games, and Bitcoin’s price reflects not so much market mechanics as the personal status and influence of key players.
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