Ponzi scheme

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1. Fraud - investment.

A Ponzi scheme is a type of investment fraud.

An illusion of high rates of investment return is created by making payments to early investors out of the proceeds from later investments.

This is an unsustainable structure, dependent for its continuation on attracting ever-larger numbers of investors.

2. Investment - markets - bubbles.

By extension, an unsustainably high level of market prices, even if not the result of criminal fraud.

Cryptocurrency price levels are challenging to defend
"The crypto market is still plagued by the accusation that it is a supersized Ponzi scheme – as long as it remains hard to define an economic case for the existence of cryptocurrencies it will be a challenge to defend a price level for any of them.
Still, despite the size and scale of the crypto scandals, the overarching impression is how little seems to have changed.
This may have implications for other financial sectors."
Tamara Basic Vasiljev, Senior Economist, Oxford Economics - The Treasurer, March 2023, p21.

See also