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  • Thumbnail for EXPLORING BITCOIN AS AN ASSET CLASS
    EXPLORING BITCOIN AS AN ASSET CLASS by Gaspar, Martin

    Bitcoin, a digital currency created in 2009, has garnered significant attention over the last couple years for its outsized returns and its significant volatility. However, since it is such a relatively new and controversial asset, many investors remain tepid to invest in it for they do not know how to approach Bitcoin as an investment. I believe this is because investors are unfamiliar with Bitcoin’s unique characteristics and do not realize the extent that Bitcoin, and its markets, have matured since its inception. Consequently, I hypothesize that Bitcoin holds enough features to be considered a legitimate asset class. In this paper, I explore Bitcoin’s potential as an asset class through several established criteria for something to be considered an asset class. I examine how well Bitcoin’s characteristics fulfill those criteria by comparing it to other established asset classes and analyzing their correlations, volatility, and risk-adjusted returns, among other statistics. I find that Bitcoin fulfills most of the criteria for an asset class, but must further develop in some areas before it is appropriate for every kind of investor to invest in it.

  • Thumbnail for EXPLORING BITCOIN AS AN ASSET CLASS
    EXPLORING BITCOIN AS AN ASSET CLASS by Gaspar, Martin

    Bitcoin, a digital currency created in 2009, has garnered significant attention over the last couple years for its outsized returns and its significant volatility. However, since it is such a relatively new and controversial asset, many investors remain tepid to invest in it for they do not know how to approach Bitcoin as an investment. I believe this is because investors are unfamiliar with Bitcoin’s unique characteristics and do not realize the extent that Bitcoin, and its markets, have matured since its inception. Consequently, I hypothesize that Bitcoin holds enough features to be considered a legitimate asset class. In this paper, I explore Bitcoin’s potential as an asset class through several established criteria for something to be considered an asset class. I examine how well Bitcoin’s characteristics fulfill those criteria by comparing it to other established asset classes and analyzing their correlations, volatility, and risk-adjusted returns, among other statistics. I find that Bitcoin fulfills most of the criteria for an asset class, but must further develop in some areas before it is appropriate for every kind of investor to invest in it.

  • Thumbnail for EXPLORING BITCOIN AS AN ASSET CLASS
    EXPLORING BITCOIN AS AN ASSET CLASS by Gaspar, Martin

    Bitcoin, a digital currency created in 2009, has garnered significant attention over the last couple years for its outsized returns and its significant volatility. However, since it is such a relatively new and controversial asset, many investors remain tepid to invest in it for they do not know how to approach Bitcoin as an investment. I believe this is because investors are unfamiliar with Bitcoin’s unique characteristics and do not realize the extent that Bitcoin, and its markets, have matured since its inception. Consequently, I hypothesize that Bitcoin holds enough features to be considered a legitimate asset class. In this paper, I explore Bitcoin’s potential as an asset class through several established criteria for something to be considered an asset class. I examine how well Bitcoin’s characteristics fulfill those criteria by comparing it to other established asset classes and analyzing their correlations, volatility, and risk-adjusted returns, among other statistics. I find that Bitcoin fulfills most of the criteria for an asset class, but must further develop in some areas before it is appropriate for every kind of investor to invest in it.