Bitcoin’s Recent Crash is Actually Good News for Regular People, Economist Argues
After a spectacular year of soaring cryptocurrency prices, Bitcoin and other major digital currencies have taken a major hit. Bitcoin, which hit a staggering peak of over $120,000 in October 2025, has since plunged to around $88,000—a drop of approximately 12% compared to last year. While this decline spells trouble for crypto enthusiasts and day traders, some economists suggest the crash could have surprisingly positive implications for the wider public.
Dean Baker, co-director of the Center for Economic and Policy Research, shared a counterintuitive perspective in his recent blog post on Beat The Press. Baker likened the role of cryptocurrencies like Bitcoin to counterfeit money flooding the economy and driving up prices of goods. According to his argument, the crypto market’s rise has effectively acted like a surge of “funny money” that wealthy investors use to acquire scarce commodities—such as housing and sports tickets—thereby inflating prices and making these goods less affordable for regular buyers.
“If some supersleuth detective figured out a way to recognize the counterfeit bills, they could then remove trillions of dollars of fake money from circulation,” Baker explained. “This would benefit the general public by reducing demand in the economy and reversing the run-up in the price of housing and Superbowl tickets.”
He emphasized that cryptocurrencies hold no intrinsic value and, as a form of ‘fake’ currency composed largely of thin air, they enable certain individuals to siphon off outsized shares of economic resources. As crypto prices fall, so does the purchasing power of those holding these digital assets. This, in turn, eases competitive pressure on everyday consumers. “To put it simply: there’s more for everyone else,” Baker said.
Baker highlighted that the major cryptocurrencies like Bitcoin and Ethereum have collectively shed over $1.2 trillion in market capitalization—an immense contraction equivalent to enough value to send every U.S. household a $10,000 check. This shift, he suggested, could create tangible relief for people who have been priced out of key markets.
Importantly, Baker noted the broader economic impact of lower crypto prices would be limited mainly to diminished crypto production and mining activities. “The only possible impact of lower crypto prices on production is that we will make less crypto,” he quipped. “The horror! The horror!”
While crypto enthusiasts grapple with losses amid the volatile market, Baker urges non-investors to see the bright side of Bitcoin’s tumble. The redistribution of purchasing power away from inflated crypto wealth may be a boon to the broader public seeking access to housing, tickets, and other costly goods.
As the cryptocurrency industry faces increased scrutiny and market retraction, this fresh viewpoint reframes the narrative: Bitcoin crashing isn’t just bad news—it might just be awesome news for the average consumer.
Joe Wilkins is a tech and transit correspondent specializing in transportation, infrastructure, and emerging technologies at Futurism.