The sudden drop in Trump's approval ratings is sending ripples through the digital asset market

How the cryptocurrency industry will reassess its "bet" on the Trump administration—this question is now emerging among market participants. Renowned economist Paul Krugman pointed out in his latest Substack article that recent price movements of Bitcoin (BTC) are closely linked to the declining influence of President Trump.

**The changing political landscape influencing the market**

According to Krugman's analysis, Bitcoin is not just a digital asset but effectively functions as a political "bet." Since the Trump administration had supported the digital asset industry and promoted crypto-friendly policies, a pattern was established where Bitcoin's trajectory was linked to the direction of Trump's presidency.

Subsequently, as Trump's political influence visibly waned, the momentum supporting his backing of the crypto industry also weakened. Krugman states that this trend has begun to exert downward pressure on Bitcoin's price.

**Deep-rooted criticisms of Bitcoin**

Krugman has long expressed concerns about Bitcoin. In his view, Bitcoin lacks economic utility, does not function well as a means of payment, and is inferior as an inflation hedge. Instead, he compares its volatility to that of high-tech stocks, emphasizing their similarities.

The current market situation, dominated by the Trump factor, highlights that the market is being shaped on a different level from Bitcoin's intrinsic value.