Amazing Tesla And Bitcoin Comment From The Nobel Prize Winner. Nobel laureate Paul Krugman has joined the ranks of the world’s intellectuals and entrepreneurs to give cryptocurrency the green light.
Last June, the American economist drew a parallel between the cryptocurrency craze and the housing bubble of the mid-2000s, saying that the use of fire’ belief in cryptoassets is compared to their enthusiasm for the market. American do before it collapses. Fast forward six months, Krugman compared crypto to Tesla and its stocks.
On Tuesday, Krugman wrote an opinion piece in the New York Times about Tsla, bitcoin, and their massive market value. In his report he asked: “Does Tesla’s story ever make sense?”
He added: “Tesla and Bitcoin may have more in common than you think.”
Tesla shares the ground
Krugman’s comments came as Tesla shares fell 11.4% in response to reports the company had cut production in China.
In the first week of January 2020 and November 2021, Tesla’s stock price increased more than 13 times. Since then, the stock has fallen 73%, reducing the value of the electric car company from nearly $1.2 billion to less than $350 billion at the end of Tuesday.
Krugman is an outstanding author and lecturer specializing in international economics and macroeconomics. He graduated from Yale University and the Massachusetts Institute of Technology.
A Nobel Prize winner in Economics, Krugman said Tesla doesn’t have the same advantages as Apple and Microsoft and doesn’t have the “network effect” of those tech titans. The economist said that two technologies and the Amazon giant still dominate because of “high network externalities”.
He said that a significant part of Tesla’s appeal was due to the perception of its CEO Elon Musk as a “nice guy”, but that perception has weakened in recent weeks.
He joked that he wouldn’t trust the billionaire to feed his cat. Krugman also drew a connection between the enthusiasm and confidence that fueled Tesla’s stock during the global COVID-19 health crisis and the meteoric rise of bitcoin at the same time.
Fingers on Bitcoin
According to Krugman, cryptocurrencies are “houses built on sand, but nothing”.
This year, the prices of all cryptocurrencies have fallen, wiping out more than half of their value. Krugman pointed out the lack of practical applications of bitcoin and its popularity with investors.
He said: “In fact something similar happened at Tsla, although the company was doing something really useful.”
According to data from Coingecko, the price of bitcoin has risen 0.5% in the last 24 hours and is currently trading at $16,515.