Bitcoin News Today: Krugman: Bitcoin's Plunge Tied to Fading 'Trump Trade' Speculation

Bitcoin's recent price swings have underscored the cryptocurrency's deep entanglement with political and institutional dynamics, as analysts dissect the interplay between U.S. President Donald Trump's waning popularity and market sentiment. Nobel laureate Paul Krugman attributes the 30% decline from Bitcoin's October peak to a fading "Trump trade," where the asset's value became increasingly tied to the 's pro-crypto policies and public endorsements. "Bitcoin isn't money or a hedge-it's a bet on Trumpism," Krugman wrote in a Substack post, noting that the cryptocurrency's volatility mirrors speculative tech stocks rather than a stable store of value. This narrative gained traction as Bitcoin fell to a seven-month low of $81,000 before rebounding to $90,348, sparking debates over whether the market is entering a bear phase.

Institutional players are recalibrating their positions amid the turbulence. BlackRock's iShares Bitcoin Trust ETF (IBIT) holders returned to a cumulative $3.2 billion profit after Bitcoin's recovery above $90,000, signaling a potential shift in investor sentiment. The ETF, which holds over 3% of Bitcoin's total supply, has become a key driver of market momentum, with inflows resuming after weeks of outflows. Standard Chartered's Geoff Kendrick highlighted ETFs as a primary catalyst for Bitcoin's 2025 rally, though recent volatility has tested their resilience. Meanwhile, SpaceX's sudden transfer of 1,163 BTC (worth $105 million) to new wallets raised questions about custodial strategies, with analysts speculating on liquidation risks.

Corporate strategies in the crypto space are also evolving. Naver's $10 billion acquisition of South Korean exchange Dunamu aims to create AI-driven financial infrastructure, positioning the firm to capitalize on global digital trends amid a $19 billion industry-wide selloff in October. Similarly, Strive Asset Management's merger plans highlight a push for Bitcoin adoption in corporate treasuries, while Riot Platforms expands beyond mining to diversify its blockchain operations. These moves reflect a broader industry shift toward institutional integration, even as legal challenges mount-such as lawsuits against Binance following the Oct. 7 Hamas attack-highlighting regulatory complexities.

Despite short-term jitters, market participants remain cautiously optimistic. Prediction market Myriad users assign a 70% probability to Bitcoin rebounding to $100,000, while interest rate cut expectations have buoyed prices. Yet Krugman's critique underscores persistent skepticism: "What is Bitcoin good for?" he asked, emphasizing its lack of tangible utility. As the market navigates political uncertainty and institutional experimentation, Bitcoin's path forward may hinge on its ability to transcend speculative trading and establish a role in global finance.