An expert economist believes the Crypto slump is due to it being tied to Donald Trump's approval rating.
Paul Krugman says the Trump trade is "unraveling" after the president went all-in on the digital currency. The Trump family made their way into meme coins and cryptocurrency earlier this year and it appears to have backfired. The Daily Beast reported the Trump family has lost upwards of $1 billion in trading crypto.
Further from that, the volatility of cryptocurrency seems to be tied with Trump's approval rating, as Krugman notes a clear link between the administration's failures and the decline of digital currencies like Bitcoin.
He explained in his Substack post, "Bitcoin's price surged after Donald Trump won last year, and its recent plunge coincides with a series of Trump political setbacks. So how should we understand Bitcoin’s recent crash? Think of it as the unraveling of the Trump trade."
"Trump remains as determined as ever to reward the industry that made his family rich, and those around him are as determined as ever to make America safe for predators of all kinds. But Trump’s power is visibly diminishing, so the price of Bitcoin, which has in effect become a bet on Trumpism, has plunged."
But when Trump looks weaker, as recent polling cited by Krugman suggests, the knock-on effect to cryptocurrencies heavily backed by the Trump administration and his family is clear.
He added, "Is it a stretch to link Trump’s political woes to the price of crypto? No. As Josh Marshall often emphasizes, power is unitary. A weakened Trump is less able to work his will on all fronts, including his efforts to promote crypto."
Analysis from Bloomberg News suggests Trump and his family has dragged their estimated collective wealth from $7.7 billion in early September to $6.7 billion in November. Trump's power base appears to be weakening as the president faces resilience from a split GOP on issues of healthcare and economics.
Trump's slip on power has been noted by The New Republic, who suggested the midterms next year could be a massive shift for the Democrats. Experts believe Trump's age will be a major factor in voter turnout and voting intent in the 2026 elections.