Crypto assets are predatory investments

Crypto assets are a form of predatory financial product. Crypto asset market making is subject to extreme forms of market manipulation not found in other regulated markets. The price formation of crypto assets is untethered to any fundamental value and instead depends purely on the greater fool theory.

The price setting by crypto exchanges and order book design admits extreme forms of asymmetric information which privileges an economic cartel who can manipulate crypto assets to extract wealth from public from unfair market making.

The base economics of crypto assets make them negative sum 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 much like gambling in a rigged casino.

References

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