Bitcoin Crash: Good News for Regular People, Says Economist
By Joe Wilkins | Published Dec 19, 2025
After a year marked by extraordinary gains in the cryptocurrency market, recent developments have seen a sharp downturn in major digital currencies. Bitcoin, the flagship cryptocurrency, soared to an eye-popping $120,000 in October 2025 before experiencing a steep fall back to approximately $88,000—a roughly 12 percent decline compared to its value a year ago.
While this drop spells trouble for crypto enthusiasts and day traders, one economist argues that Bitcoin’s crash could actually be a boon for the wider public.
Dean Baker, Co-director of the Center for Economic and Policy Research, offers a striking perspective in his recent blog, Beat The Press. Baker likens cryptocurrencies to counterfeit currency—an intangible and artificial form of money that enables investment groups and speculative actors to dominate scarce resources, from housing to event tickets. These actors use crypto “funny money” to buy up goods, driving prices beyond the reach of ordinary consumers.
“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 explains. “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. It is the same story with plunging crypto prices.”
Cryptocurrency, which many financial experts argue has no intrinsic value, allows holders to absorb large portions of the economy disproportionately. As crypto prices tumble and the market shrinks, this “fake money” recedes, easing inflationary pressures on everyday goods and services.
“To put it simply: there’s more for everyone else,” Baker says.
The scale of the crypto market’s decline is enormous. Baker notes that major cryptocurrencies like Bitcoin and Ethereum have collectively lost over $1.2 trillion in market capitalization—an amount he equates to enough money to send every American household a $10,000 check.
From Baker’s vantage point, those who do not hold cryptocurrency stand to gain from its falling value. He cheekily adds, “The only possible impact of lower crypto prices on production is that we will make less crypto. The horror! The horror!”
This viewpoint counters the common narrative that crypto crashes are universally negative, highlighting instead how the contraction of speculative and inflated assets can relieve economic pressures on non-investors.
Context in the Broader Market
Bitcoin’s rollercoaster ride has sent ripples through multiple sectors, from retail investors to institutional players. Following October’s peak, exchanges and crypto casinos have faced turmoil, with some platforms halting withdrawals amid the market stress. China’s crackdown on Bitcoin mining contributed to a falling GPU (graphics processing unit) market, further impacting industry hardware prices.
Public figures such as former President Donald Trump have weighed in, calling Bitcoin a “scam,” adding to the polarized discourse surrounding crypto’s legitimacy.
Meanwhile, regulators remain vigilant. The SEC’s Twitter account was hacked with fake Bitcoin news recently, highlighting continued cybersecurity risks tied to high-profile cryptocurrency events.
Looking Ahead
Dean Baker’s economic argument serves as a reminder to re-evaluate the true societal costs and benefits of cryptocurrencies. As crypto values ebb and flow wildly, the broader economic impact implicates more than just investors. The displacement effect crypto can have on housing, tickets, and other assets may ease with ongoing price corrections, potentially benefiting millions.
While crypto proponents hope for rebounds, the data suggests that for many regular people, a declining crypto market might finally translate into more affordable living costs and less inflation pressure.
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- GPU Prices Plummet After China Cracks Down on Bitcoin Mining
Joe Wilkins covers technology and transit for Futurism, focusing on the intersections of emerging technologies, governance, and society.
[Illustration by Tag Hartman-Simkins / Futurism. Image Source: Getty Images]
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