Okay, let's talk about Bitcoin. And Trump. The narrative floating around is that Bitcoin's recent price dip is tied to Trump's declining political clout. Nobel laureate Paul Krugman is pushing this idea hard. Is there data to back it up, or is it just a convenient story?
Bitcoin: Trump Trade or Just Market Volatility?
Correlation or Causation?
Krugman points to the timing: Bitcoin's surge post-Trump's win and its recent slide alongside his slipping poll numbers. Bitcoin hit a high of $126,000 last month before tumbling to around $87,000 (as of Wednesday). A 25% drop since late October. The Bloomberg Billionaires Index even claims the Trump family lost a cool $1 billion due to the crypto selloff.
But correlation isn't causation. Remember that old saw?
Krugman argues that Trump's pro-crypto policies—pushing for a government Bitcoin reserve, allowing 401(k) investments in crypto, and even pardoning Binance's Changpeng Zhao—fueled the Bitcoin boom. He sees Bitcoin as a "Trump trade," a bet on Trumpism.
The Trump Trade is Unraveling
Now, Trump *does* have skin in the game. Estimates put his Bitcoin holdings at around $870 million. And Eric and Don Jr.'s Bitcoin mining venture, American Bitcoin, hit a $5 billion valuation on its debut. That's a lot of incentive to keep the crypto train rolling.
The question is: can we isolate Trump's influence from other market forces? White House spokesperson Kush Desai calls it moronic to attribute Bitcoin's price fluctuations to "noneconomic matters." He's got a point.
Bitcoin Crash: More Than Just Trump's Poll Numbers?
Digging Deeper into the Numbers
Bitcoin's volatility is notorious. It's prone to wild swings based on everything from interest rates to regulatory news. To pin this specific crash solely on Trump seems…simplistic. (And I hate simplistic.)
Krugman highlights "blowout Democratic victories" and bipartisan pushback as signs of Trump's weakening grip. He even quotes Josh Marshall's "power is unitary" idea—that weakness in one area bleeds into others.
But let's be real: political analysts are always looking for narratives. And Krugman has never hidden his disdain for crypto (or Trump, for that matter).
Here's where I get skeptical. The article mentions that since Bitcoin peaked close to $125,000 on October 6th, it plunged more than 30% to about $81,000 on November 21st, wiping out all 2025 gains and marking its worst monthly decline since 2022. Weaker U.S. unemployment data, fading expectations of Federal Reserve rate cuts, and a broad risk-off turn that punished crypto harder than equities, dragging total digital-asset market value below $2.8 trillion. Nearly $800 billion evaporated since the October peak as leveraged positions unwound and correlations with tech stocks intensified.
There's a lot more going on than just Trump's poll numbers. It's possible that Krugman is cherry-picking to fit his narrative.
And this is the part I find genuinely puzzling. If Bitcoin is such a pure "Trump trade," why did it surge *before* the election? Shouldn't it have waited until Trump actually won?
I see the argument about Trump's policies *potentially* influencing the price, but I think it's a stretch to say that the recent crash is a direct consequence of his waning power. The market is far more complex than that.
So, What's the Real Story?
Occam's Razor suggests a simpler explanation: Bitcoin is a volatile asset class, and the recent crash is likely due to a combination of factors—market correction, regulatory uncertainty, and macroeconomic trends. Blaming it all on Trump is a convenient narrative, but the data doesn't fully support it.
