In a Sept. 7, 2011 article in The New York Times, leftist economist Paul Krugman insisted that Bitcoin was a bubble waiting to burst. He questioned the cryptocurrency's viability as a currency, criticized its decentralized nature, and expressed skepticism about its long-term prospects.
At the time, Bitcoin was trading at $7.
How did Krugman's prognostication turn out?
Bitcoin now trades at $25,883.94. That's up 365,999 percent since Krugman wrote it off as a stupid idea.
When Krugman's article was published, Bitcoin was still in its infancy. The digital currency, created by the pseudonymous Satoshi Nakamoto, had only been around for a couple of years. It was largely unknown to the mainstream, with a small but passionate community of early adopters and tech enthusiasts.
"Fast forward to today, and Bitcoin's remarkable journey has proven Krugman's skepticism to be one of the most costly missed opportunities in financial history," Reed MacDonald wrote for BitcoinMagazine.com on Wednesday.
In his 2011 piece, Krugman criticized Bitcoin for being deflationary, adding that there is an "incentive to hoard the virtual currency rather than spend it."
MacDonald noted that Krugman's claims "have been undermined by Bitcoin's continued utility as a currency, BTC's rise to $25,000 demonstrating its potential as a means of transferring value across borders with relative ease."
Bitcoin has even been adopted as a currency in El Salvador, where it serves alongside the U.S. dollar as a form of legal tender, in wide use by small merchants.
"Further, Bitcoin, 15 years on, retains a niche in online commerce," MacDonald added.
In retrospect, MacDonald concluded, "Krugman's dismissal of Bitcoin at $7 serves as a reminder of the unpredictability of financial markets and the potential for revolutionary technologies to reshape the world."
#Bitcoin price: $7 💀 pic.twitter.com/uBdSAEXwxg
— RIZZO (@pete_rizzo_) September 6, 2023
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