17 lines
1.4 KiB
Markdown
17 lines
1.4 KiB
Markdown
# Crypto assets are predatory investments
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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).
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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.
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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.
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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.
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## References
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* [@bindseil_encrypted_2022]
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* [@momtaz_entrepreneurial_2020]
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* [@kapsis_should_2021]
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* [@iansiti_truth_2017]
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* [@krugman_bitcoin_2018]
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* [@krugman_bitcoin_2013]
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* [@glongloff_bitcoin_nodate] |