• Paul Krugman, Nobel Laureate, has compared the crypto craze to the US real estate bubble of the mid-2000s.
• He also compared the crypto to Tesla and its stocks in a New York Times opinion piece.
• Tesla’s stock fell 11.4% in response to reports of manufacturing output reduction in China, reducing its market valuation from $1.2 trillion to $350 billion.
Paul Krugman, Nobel Laureate and acclaimed economist, has joined the ranks of the world’s intellectuals and business moguls to give the thumbs-down to cryptocurrency. Last June, the American economist drew parallels between the crypto craze and the real estate bubble of the mid-2000s, stating that consumers’ belief in crypto assets is comparable to their enthusiasm in the US home market prior to its collapse.
Fast forward six months, Krugman has compared the crypto to Tesla and its stocks. On Tuesday, Krugman wrote an opinion piece in the New York Times regarding Tesla, bitcoin, and their massive market prices. In his article, he inquired: “Did the Tesla story ever make sense?” He added: “Tesla and bitcoin may have more in common than you think.”
Krugman’s remarks came after Tesla’s stock fell 11.4% in response to reports that the company reduced its manufacturing output in China. Between the first week of January 2020, and November 2021, Tesla’s stock price increased by more than 13 times. Since then, the stock has dropped 73%, reducing the market valuation of the electric car firm from almost $1.2 trillion to less than $350 billion as of Tuesday’s close.
Krugman is a notable author and educator who specializes in International Economics and Macroeconomics. He is a Yale University and Massachusetts Institute of Technology graduate and has been awarded the Nobel Memorial Prize in Economics for his work on international trade. He is also a professor at Princeton University and a columnist for The New York Times.
Krugman is just one of many intellectuals and business moguls to express their doubts about the cryptocurrency market. His views on the crypto craze add to the growing concern about the potential bubble in the crypto market. With the volatility of the market, investors should be cautious when investing in cryptocurrency, as the value of their investments could be significantly reduced.