Paul Krugman: Bitcoin and Tesla Stock Are Supported by Hype and Faith

  • Paul Krugman criticized Tesla stocks, saying that it is not as valuable as Apple, and Microsoft. 
  • As per Krugman, there is no serious use for cryptocurrency other than ‘money laundering.’

Paul Krugman, the Nobel Prize-winning economist compares Elon Musk’s Tesla stock with Bitcoin (BTC). In an opinion piece recently published in the New York Times, Krugman stated that Tesla has more in common with the dominant currency of the global crypto market. He also expressed that both assets’ prices are based on hype and trust.

The Nobel prize laureate has criticized cryptocurrencies by saying:

Despite years of effort, nobody has yet managed to find any serious use for cryptocurrency other than money laundering. But prices nonetheless soared on the hype, and are still being sustained by a hard-core group of true believers.

He also slammed Tesla stocks by balancing with cryptocurrencies. As per Krugman, those similar things must have happened with Tesla, despite the fact that the company makes useful items.

Paul Krugman Knocks Tesla

Due to the fact that Tesla does not experience significant network effects, Paul Krugman claimed that it is not as valuable as the leading tech companies such as Apple, and Microsoft. The economist also pointed out that Microsoft Word and Excel continue to be the standard choice for businesses as they are the most well-known and widely used technologies. Additionally, Apple has an ecosystem of devices, apps, and services that makes it difficult for users to switch, as per Krugman. 

According to Krugman, there are no obvious network effects that come with owning a Tesla as opposed to a competitor’s automobile. In contrast, Tesla confronts increasing rivalry in the EV market from legacy automakers like GM and Ford. He asked how Tesla will control its market and make large profits when the hype surrounding its products ineluctably subsided.

However, at the time of writing, Tesla Inc stock (TSLA) has increased by nearly 8.08% during the last 24 hours. TSLA is currently trading around $121.82, as per Google Finance. 

TSLA Price Chart (Source: Google Finance)

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