Cryptocurrencies as financial assets and portfolio investment strategy : is the utilization of the cryptocurrencies as a financial asset a good opportunity for investors?
Ollivier, Cyril (2023)
2023
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2023051711504
https://urn.fi/URN:NBN:fi:amk-2023051711504
Tiivistelmä
The purpose of this study was to know if we can use the cryptocurrencies as a financial asset in the same way as stocks, bonds, or ETFs. In that aim we used the Modern Portfolio Theory for build different portfolios and compare it to a traditional stock’s portfolio. This allowed us to analyse and compare our results and strategy, in terms of annual return, volatility and Sharpe ratio to find out whether holding a cryptocurrency portfolio is relevant or not for an investor.
Quantitative research was utilized in this study. To carry out this study, we based our research on the evolution of cryptocurrencies prices over the past 8 years. Overall, our data is made up of the top 20 cryptocurrencies by market capitalization and 10 stocks. The data obtained for this study comes from Yahoo Finance and was downloaded with a Python program that I had written which allowed us to do our analysis and application of the Modern Portfolio Theory.
The results of our study allowed us to see that holding a cryptocurrency portfolio could be interesting for an investor. Indeed, as our results show, cryptocurrencies can give an expected annual return higher than that offered by stocks. However, this is not without risk as we may find these assets are far more volatile than traditional assets. Thus, it appears that cryptocurrencies in view of their performance can be considered as a very relevant financial asset for an investor, particularly regarding the implementation for a portfolio diversification strategy.
Quantitative research was utilized in this study. To carry out this study, we based our research on the evolution of cryptocurrencies prices over the past 8 years. Overall, our data is made up of the top 20 cryptocurrencies by market capitalization and 10 stocks. The data obtained for this study comes from Yahoo Finance and was downloaded with a Python program that I had written which allowed us to do our analysis and application of the Modern Portfolio Theory.
The results of our study allowed us to see that holding a cryptocurrency portfolio could be interesting for an investor. Indeed, as our results show, cryptocurrencies can give an expected annual return higher than that offered by stocks. However, this is not without risk as we may find these assets are far more volatile than traditional assets. Thus, it appears that cryptocurrencies in view of their performance can be considered as a very relevant financial asset for an investor, particularly regarding the implementation for a portfolio diversification strategy.