# Crypto assets do not have a verifiable valuation model
Crypto tokens have no reliable [valuation method](../concepts/valuation-model.md). It is not possible to develop a theoretical [value](../concepts/value.md) for a crypto token because there is no demand curve generated by a [use case](../concepts/use-value.md) or any [income or cashflows](../concepts/income-cashflows.md) associated with the [security](../concepts/security.md). Crypto tokens have a strictly zero [fundamental value](../concepts/fundamental-value.md) and a [present value](../concepts/present-value.md) of zero because they have zero income.

Instead the price of a crypto asset swings about wildly depending on the whims of fluctuating demand, random sentiment and market mania of the larger crypto [bubble](../concepts/bubble.md). Crypto assets are a manifestation of the [greater fool theory](../concepts/greater-fool-theory.md) and the price of a crypto asset is defined simply by what people believe the next "fool" will pay for it.

Models such as "Stock To Flow" have shown no predictive power to explain the [price formation](../concepts/price-formation.md) of assets like [bitcoin](../concepts/bitcoin.md) on long time scales. These models have no rigorous foundations based on any mainstream economics.
 
Other products in [bubble](../concepts/bubble.md) such as tulips or beanie babies have exhibited similar market structure to crypto tokens but on smaller scales.

## References

1. Shiller, Robert J. 2017. ‘What Is Bitcoin Really Worth? Don’t Even Ask.’ The New York Times, 15 December 2017, sec. Business. https://www.nytimes.com/2017/12/15/business/bitcoin-investing.html.
1. Taleb, Nassim Nicholas. 2021. ‘Bitcoin, Currencies, and Fragility’. ArXiv:2106.14204 [Physics, q-Fin], July. http://arxiv.org/abs/2106.14204.
1. Cembalest, Michael. 2022. ‘The Maltese Falcoin: On Cryptocurrencies and Blockchains’. https://privatebank.jpmorgan.com/content/dam/jpm-wm-aem/global/pb/en/insights/eye-on-the-market/the-maltese-falcoin.pdf.
1. Silverman, Gary. 2021. ‘Crypto Has “No Inherent Worth” But Is Good to Trade, Says Man Group Chief’. Financial Times, 26 July 2021. https://www.ft.com/content/9275baf4-0422-43a1-b8c9-9317882ca874.
1. Stolfi, Jorge. n.d. ‘Bitcoin Is a Ponzi’. Accessed 19 March 2022. https://ic.unicamp.br/~stolfi/bitcoin/2020-12-31-bitcoin-ponzi.html.
1. Diehl, Stephen. 2021. ‘The Intellectual Incoherence of Cryptoassets’. 7 November 2021. https://www.stephendiehl.com/blog/crypto-absurd.html.
1. Krugman, Paul. 2018a. ‘Bitcoin Is Basically a Ponzi Scheme’. The Seattle Times 30.
1. ———. 2021a. ‘Technobabble, Libertarian Derp and Bitcoin’. The New York Times 21.
1. ———. 2021b. ‘The Brutal Truth About Bitcoin’. The New York Times 21.