Paul Krugman throws in the towel on calling the demise of bitcoin: 'Think of it as a cult that can survive indefinitely'

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Paul Krugman throws in the towel on calling the demise of bitcoin: 'Think of it as a cult that can survive indefinitely'
REUTERS/Brendan McDermid
  • Nobel Prize-winning economist Paul Krugman said he's given up on predicting the "imminent demise" of bitcoin.
  • In a string of comments on Twitter, Krugman outlined what he sees as flaws in the cryptocurrency, but begrudgingly admitted it's likely here to stay.
  • Krugman called bitcoin investing a "cult that can survive indefinitely."
Bitcoin isn't a convenient medium of exchange and carries with it other shortcomings. But Nobel Prize-winning economist Paul Krugman has begrudgingly admitted that the cryptocurrency is here to stay.

"BTC isn't a new innovation; it's been around since 2009, and in all that time nobody seems to have found any good legal use for it," wrote Krugman in a string of comments he posted about bitcoin on Twitter on Wednesday.

He continued: "But I've given up predicting imminent demise. There always seem to be a new crop of believers. Maybe just think of it as a cult that can survive indefinitely."

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The New York Times opinion columnist has previously called himself a "crypto skeptic" and on Wednesday he outlined what he sees as flaws in bitcoin, the world's most traded digital currency.

"It's not a convenient medium of exchange; it's not a stable store of value; it's definitely not a unit of account," he wrote. "Its value rests on the perception that it's a technologically sophisticated way to protect yourself from the inevitable collapse of fiat money, which is coming one of these days, or maybe one of these centuries. Or, as I say, libertarian derp plus technobabble."

His comments echoed his July 2018 article in which he said he could be wrong about holding a skeptical view toward cryptos. "But if you want to argue that I'm wrong, please answer the question, what problem does cryptocurrency solve?"

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Krugman - who won the Nobel Prize in Economic Sciences in 2008 for his work on international trade theory - posted his comments on Twitter on the same day of a massive selloff in bitcoin and other cryptocurrencies after the People's Bank of China said digital tokens can't be used as a payment form by financial institutions.

Bitcoin at its lows fell 31% to around $30,000 on Wednesday before paring losses.

For a more in-depth discussion, come on over to Business Insider Cryptosphere — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve.

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