Nobel Prize-winning economist says "crypto assets will soon come to an end"
Nobel Prize-winning economist says "crypto assets will soon come to an end"
Nobel Prize–winning economist Paul Krugman has issued a stark warning that the latest downturn in the cryptocurrency market marks the opening chapter of the end of digital assets.
According to crypto-focused outlet U.Today on February 6 (local time), Krugman recently intensified his criticism by likening Bitcoin’s sharp plunge to Fimbulwinter, the brutal winter in Norse mythology that precedes the end of the world. He argued that the current downturn is fundamentally different from past correction cycles, asserting that the libertarian ideology and political backing that once supported the value of crypto assets have reached their limits.
Krugman pointed out that despite 17 years since Bitcoin’s creation, it has still failed to establish itself as a practical means of payment. He labeled Bitcoin a failed technology, noting that although it emerged only slightly later than the first-generation iPhone, it has contributed virtually nothing to real economic activity. He particularly emphasized that Bitcoin’s dismal performance while gold prices have surged proves that the narrative of Bitcoin as “digital gold” was entirely fictitious.
This downturn has also seen other prominent crypto skeptics, including Nouriel Roubini and Mark Dow, raise their voices in unison. Roubini described the situation as a “crypto apocalypse,” predicting a complete market collapse. Bitcoin fell intraday to as low as $60,255, marking its lowest level since October 2024, while hundreds of billions of dollars in market capitalization evaporated in an instant.
Notably, some market optimists are paradoxically interpreting this chorus of pessimism as a bottom signal. They cite past instances in which prices rebounded whenever skeptics declared Bitcoin dead. However, Krugman countered that previous rebounds were driven by blind faith, whereas this time the inflow of institutional participation and the politicization of crypto have failed, completely destroying its support base.
The crypto market is currently enduring its harshest winter yet amid a convergence of negative factors, including large-scale delistings by Binance and asset sales worth hundreds of millions of dollars by BlackRock. Krugman reiterated that Bitcoin will not remain a sustainable asset and advised investors to shift their focus to assets with tangible value, such as gold.
Whether Bitcoin will, as Krugman argues, fail to overcome its lack of intrinsic value and slide toward the $50,000 level despite having institutional infrastructure in place is expected to be a key inflection point for the market. As even institutional funds that entered through spot Bitcoin ETFs show signs of retreat, debate over the market’s structural flaws is intensifying. The crypto industry is closely watching whether this Fimbulwinter signifies not just a seasonal chill but a complete overhaul of the ecosystem.
*Disclaimer: This article is for investment reference only, and no responsibility is taken for investment losses based on its contents. The information should be interpreted solely for informational purposes.*
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