# Crypto assets are predatory investments
Crypto assets are a form of predatory financial product. Crypto asset [market making](../concepts/market-maker.md) is subject to extreme forms of [market manipulation](../concepts/market-manipulation.md) not found in other regulated markets. The [price-formation](../concepts/price-formation.md) of crypto assets is untethered to any [fundamental-value](../concepts/fundamental-value.md) and instead depends purely on the [greater-fool-theory](../concepts/greater-fool-theory.md). 

The price setting by crypto excahnges and [order-book](../concepts/order-book.md) design admits extreme forms of [asymmetric-information](../concepts/asymmetric-information.md) which privileges an [economic cartel](../concepts/cartel.md) who can manipulate crypto assets to extract wealth from public from unfair market making.

The base economics of crypto assets make them [negative sum](negative-sum.md) which guarantees the amount of loses in the asset class exceed the gains.

Crypto assets are thus a form of predatory finance with negative [expected-return](../concepts/expected-return.md) much like [gambling](../concepts/gambling.md) in a rigged casino.

## References
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1. Hamrick, JT, Farhang Rouhi, Arghya Mukherjee, Amir Feder, Neil Gandal, Tyler Moore, and Marie Vasek. 2018a. ‘An Examination of the Cryptocurrency Pump and Dump Ecosystem’. http://ssrn.com/paper=3303365.
1. ———. 2018b. ‘The Economics of Cryptocurrency Pump and Dump Schemes’.
1. Kamps, Josh, and Bennett Kleinberg. 2018. ‘To the Moon: Defining and Detecting Cryptocurrency Pump-and-Dumps’. Crime Science 7 (1): 18.
1. Li, Tao, Donghwa Shin, and Baolian Wang. 2019. ‘Cryptocurrency Pump-and-Dump Schemes’. Available at SSRN 3267041.
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1. Krugman, Paul. 2013. ‘Bitcoin Is Evil’. Paul Krugman Blog (blog). 28 December 2013. https://krugman.blogs.nytimes.com/2013/12/28/bitcoin-is-evil/.
1. ———. 2018a. ‘Bitcoin Is Basically a Ponzi Scheme’. The Seattle Times 30.
———. 2018b. ‘Transaction Costs and Tethers: Why I’m a Crypto Skeptic’. The New York Times 21.
1. ———. 2021a. ‘Technobabble, Libertarian Derp and Bitcoin’. The New York Times 21.
1. ———. 2021b. ‘The Brutal Truth About Bitcoin’. The New York Times 21.
1. Taleb, Nassim Nicholas. 2021. ‘Bitcoin, Currencies, and Fragility’. ArXiv:2106.14204 [Physics, q-Fin], July. http://arxiv.org/abs/2106.14204.


## References
* [@bindseil_encrypted_2022]
* [@momtaz_entrepreneurial_2020]
* [@kapsis_should_2021]
* [@iansiti_truth_2017]
* [@krugman_bitcoin_2018]
* [@krugman_bitcoin_2013]
* [@glongloff_bitcoin_nodate]