In the swirling vortex of financial speculation, few assets embody the clash between hype and harsh reality quite like Bitcoin. Nobel laureate economist Paul Krugman has long been a skeptic, and his latest salvo cuts deeper than ever: Bitcoin isn't just a flawed invention - it's a predatory scheme masquerading as innovation, now inexorably tied to the fortunes of Donald Trump.
As of late November 2025, with Bitcoin slumping to around $82,000 - a 32% plunge from its all-time high of $126,000 just weeks earlier - Krugman's critique feels prescient. The cryptocurrency's volatility mirrors the broader market's jitters, but its sharper drops, like the 18% slide from $107,500 on November 11 to near $89,000, underscore a fragility that goes beyond economics into the realm of politics and peril.
At its core, Bitcoin promises revolution but delivers little utility. It fails as a medium of exchange: transaction fees can exceed $50 during peaks, and processing times lag behind Visa's milliseconds. As an inflation hedge? Laughable - its price surged 150% in 2024 amid cooling U.S. inflation but cratered during the 2022 bear market when Fed rate hikes hit. And as a portfolio diversifier?
Data from the past three years shows Bitcoin's correlation with the S&P 500 exceeding 0.7, often amplifying AI-driven tech rallies before amplifying the crashes. In essence, it's a high-octane bet on speculation, not stability.
Worse, Bitcoin's blockchain anonymity - pseudonymous addresses shielding true identities - has made it a haven for illicit flows. Chainalysis reported $24.2 billion in crypto-linked crime in 2024, with Bitcoin facilitating 46% of ransomware payments and 22% of darknet market trades. But the flip side is equally grim: that same opacity turns holders into targets. Private keys, the digital passcodes granting sole access to funds, are bearer instruments - no recovery if lost or stolen.
This has sparked a gruesome trend: crypto kidnappings. In 2025 alone, at least 17 high-profile cases worldwide involved abductors torturing victims for seed phrases, per Interpol data.
The phenomenon peaked at the Bitcoin 2025 Conference in Miami, where organizers hosted a full-day "Crypto Security Summit" on November 15, complete with sessions on "evading zip-tie restraints" and "duress passphrase protocols" - grim reminders that fortunes in code can vanish in a moment of coercion.
This underbelly feeds a broader ecosystem of predation. Crypto promoters, from influencers to venture funds, hawk tokens and leveraged bets to retail newcomers, often via social media pump-and-dumps. The SEC flagged over 300 such schemes in 2025, many targeting seniors via TikTok ads promising "10x returns."
When markets sour - as they did post-October, with altcoins like Solana down 45%—these investors face margin calls and liquidations, wiping out nest eggs. Bitcoin itself shed 25% from its October 31 peak of $109,000, dragging the total crypto market cap below $2.5 trillion for the first time since July.
Yet Bitcoin's resilience stems from its cult-like devotion. Believers, dubbed "HODLers," view dips as buying opportunities, a faith that propelled recoveries after the 2018 crash (from $3,200 to $69,000 by 2021) and the FTX implosion. Evangelists like Michael Saylor of MicroStrategy, who holds 252,000 BTC worth $20 billion, preach it as "digital gold." But Krugman argues this zealotry blinds adherents to risks, much like past manias in tulips or dot-coms.
Enter the "Trump trade." Bitcoin's 2024 post-election surge - up 85% in the month after Trump's November victory - coincided with his administration's crypto embrace. The Trump family, via entities like World Liberty Financial, reportedly pocketed $150 million in industry donations and fees since 2023, per FEC filings.
In gratitude, Trump inked Executive Order 14127 on August 7, 2025, titled "Democratizing Access to Alternative Assets for 401(k) Investors." This directive mandates the Department of Labor to revise rules, potentially unlocking $7 trillion in retirement funds for crypto allocations—up from the current 0.1% cap. Critics, including AARP, warn it could expose 60 million Americans to volatility they don't grasp, echoing the 2008 crisis's pension losses.
Trump's favoritism extends to clemency: On October 15, 2025, he pardoned Changpeng "CZ" Zhao, Binance's founder, convicted in 2024 of anti-money-laundering violations that funneled $4.3 billion in illicit funds. Trump later quipped on "60 Minutes," "No idea who he is," despite Zhao's $50 million campaign contribution. House Democrats, led by Rep. Sean Casten, fired off a November 6 letter condemning it as "a green light for white-collar crime."
This pro-crypto tilt dovetails with a broader deregulatory assault. Trump's Treasury Secretary Scott Bessent has pushed to gut the Consumer Financial Protection Bureau (CFPB), slashing its budget by 40% in the 2026 proposal and halting 75 enforcement actions. Fed allies like Vice Chair Michelle Bowman advocate easing Dodd-Frank stress tests, which curbed the leverage that fueled 2008's meltdown. For crypto schemers, it's a boon: Binance volumes hit $2 trillion monthly post-pardon, per CoinMarketCap.
But the Trump trade is unraveling as his grip weakens. Approval ratings, once hovering at 48% post-inauguration, have cratered to 38% in a Reuters/Ipsos poll from November 18, battered by 7% inflation and grocery prices up 12% year-over-year. An Emerson survey pegged it at 41% on November 7, with independents fleeing at 62% disapproval.
The November 4 off-year elections hammered the nail. In Virginia, Democrats swept the governorship (Abigail Spanberger over Winsome Sears, 52-47%), lieutenant governor, attorney general, and flipped 12 House seats, ending a GOP trifecta. New Jersey saw Rep. Mikie Sherrill crush Jack Ciattarelli 54-44 for governor, retaining Democratic control amid voter backlash to federal overreach. These "blue wave" upsets - defying GOP gerrymanders - signal eroding party loyalty.
Compounding the chaos: the Epstein files. On November 19, Trump reluctantly signed the Epstein Transparency Act, mandating DOJ release of 2025 documents within 30 days. Yet loopholes abound - redactions for "national security" - sparking fury. Newly unsealed emails reveal Trump's 1990s flights on Epstein's jet (seven logged) and a 2002 quote calling him a "terrific guy" who likes "beautiful women... on the younger side."
MAGA diehards, who long peddled QAnon tales of Trump battling a "deep state pedophile ring," now grapple with betrayal. A November 20 NPR analysis ties Epstein's web to figures like Noam Chomsky and Steve Bannon, but Trump's mentions dominate headlines, with Google searches for "Trump Epstein" spiking 300%.
As Josh Marshall of Talking Points Memo often notes, power is fungible: a humbled Trump means stalled agendas, from crypto carve-outs to tax cuts. Bitcoin's descent - from $100,000+ in early November to sub-$85,000 - mirrors this. If the cult can't sustain it alone, and Trump's machine falters, the emperor's new coin may finally prove naked.
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Krugman's verdict? Bitcoin thrives not on value, but on vulnerability - preying on the uninformed while hitching to political predators. In a market where AI stocks buoy the Nasdaq amid recession fears, crypto's tie to one man's whims renders it uniquely perilous. Investors beware: the next dip might not rebound.
