Cryptocurrencies: applications and investment opportunities

Inci, A. Can; Lagasse, Rachel

doi:10.1108/jcms-05-2019-0032

Cited by 49 publications

(51 citation statements)

References 22 publications

(31 reference statements)

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“…Note that the robustness test applied 40 days of GARCH refits in the optimization [2]. The results of this study support the finding of a research by Inci and Lagasse (2019) who used an earlier time-series sample that Bitcoin is feasible for cryptocurrencies diversification.…”

Section: Robustness Testssupporting

confidence: 82%

Dynamic risk-based optimization on cryptocurrencies

Nugroho

2021

JCMS

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PurposeIt is crucial to find a better portfolio optimization strategy, considering the cryptocurrencies' asymmetric volatilities. Hence, this research aimed to present dynamic optimization on minimum variance (MVP), equal risk contribution (ERC) and most diversified portfolio (MDP).Design/methodology/approachThis study applied dynamic covariances from multivariate GARCH(1,1) with Student’s-t-distribution. This research also constructed static optimization from the conventional MVP, ERC and MDP as comparison. Moreover, the optimization involved transaction cost and out-of-sample analysis from the rolling windows method. The sample consisted of ten significant cryptocurrencies.FindingsDynamic optimization enhanced risk-adjusted return. Moreover, dynamic MDP and ERC could win the naïve strategy (1/N) under various estimation windows, and forecast lengths when the transaction cost ranging from 10 bps to 50 bps. The researcher also used another researcher's sample as a robustness test. Findings showed that dynamic optimization (MDP and ERC) outperformed the benchmark.Practical implicationsSophisticated investors may use the dynamic ERC and MDP to optimize cryptocurrencies portfolio.Originality/valueTo the best of the author’s knowledge, this is the first paper that studies the dynamic optimization on MVP, ERC and MDP using DCC and ADCC-GARCH with multivariate-t-distribution and rolling windows method.

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Section: Robustness Testssupporting

confidence: 82%

Dynamic risk-based optimization on cryptocurrencies

Nugroho

2021

JCMS

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“…Altcoin is a currency based on blockchain technology, which is dissimilar to that used by Bitcoin (Huang et al, 2018). Hence, some Altcoins are not limited to the main function of Bitcoin, which is a medium of payment, rather, there are other functions as well, such as Ripple and Ethereum, that support the building of a smart contract in its blockchain (Inci & Lagasse, 2019).…”

Section: The Expansion Of Digital Currencymentioning

confidence: 99%

“…Most Altcoins are created as instruments for speculative investment, whereas Bitcoin was created as a medium of exchange for services or online/offline products (Huang et al, 2018;Inci & Lagasse, 2019). Some Altcoins have more attractive characteristics compared to Bitcoin, such as a higher level of security and a shorter time for certifying each transaction, which is only a few seconds compared to Bitcoin's minimum time of 10 minutes (Afilipoaie & Shortis, 2015;Ammous, 2016;Meera, 2018).…”

Section: The Expansion Of Digital Currencymentioning

confidence: 99%

Classification of Cryptocurrency: A Review of the Literature

Fokri¹

2021

TURCOMAT

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Technological development has affected the global financial industry. The use of digital currency is increasingly gaining a place among the world’s population, so much so that there are 2486 types of digital currency on record. Scholars in Islamic finance as well as Fatwa institutions all over the world have delivered their religious decree concerning the digital currency; hence, most discussions about the use of the decree was only directed at Bitcoin as a medium of payment although some digital currencies have other functions, such as being utility and security tokens. Therefore, the decree concerning other digital currencies cannot apply the decree issued for Bitcoin only because each digital currency has a different conceptual framework. Hence, this study, which applied the qualitative approach and a descriptive research design, intended to analyse the classification of digital currencies according to their function and characteristics. The findings show that digital currency is classified into coins, currency, tokens, payment tokens, utility tokens and security or asset tokens. Coins function as a medium of payment and store of value that was developed using its own blockchain. Currency is a medium of exchange and can be exchanged with any form of money, including the crediting or debiting of an account. Tokens represent services, financial instruments or infrastructure that is developed using the blockchain technology of other digital currencies. Tokens are divided into three types according to their function, namely payment tokens, utility tokens and security or asset tokens. The classification of digital currencies provides a guideline for the public who wish to carry out transactions using digital currencies. It is important to ensure that transactions carried out in accordance with the syarak will help alleviate cases of fraud related to investment and sale of digital currencies.

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“…In this regard, the regulatory differentiation of the multitude of cryptocurrencies is a particularly significant challenge for international boards, after which the U.S. Securities and Exchange Commission (SEC) has issued a definition that requires a case-by-case decision (Trautman and Dormann, 2018). The core of any classification attempt is based on the interpretation of the individual intended use and the underlying industry and technology use (Inci and Lagasse, 2019). Following this approach, the informational basis of the technology is presented below first, followed by an introduction of arguably one of the most forward-looking industry sectors for the underlying technology.…”

Section: Introductionmentioning

confidence: 99%

Blockchain Technology and Real Estate – a cluster analysis of applications in global markets in the year 2021

Schmidt

Elferich²

2021

SHS Web Conf.

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Research background: Since the announcement by entrepreneur Elon Musk in the year 2021 about the inclusion of Bitcoin on the balance sheet of his automotive company Tesla, the economic significance of cryptocurrencies for the financial industry is taking on progressive importance. In addition to the financial economic consideration of cryptocurrencies, the underlying blockchain technology is undergoing a disruptive growth across industries – e.g. from automotive to real estate. Accordingly, in the report ‘Deep Shift Technology Tipping Points and Societal Impact’, the World Economic Forum predicted a far-reaching significance of the blockchain technology as early as 2015, and in 2020, the Global Future Council published a finding that the crypto market has reached a point of inevitability. Purpose of the article: The aim of this paper is to examine the degree of integration of the blockchain technology within the framework of a current market investigation using the real estate industry as an example. The leading application areas of the blockchain technology in the real estate industry will be presented. Methods: The market investigation of this paper is based, among other things, on a cluster analysis that examines a regional differentiation of the application areas on a global level. Findings & Value added: In this context, the market research indicates that the blockchain technology can be applied significantly in the real estate industry and that the Global Future Council finding can be replicated in many areas.

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Cryptocurrencies: applications and investment opportunities

Cited by 49 publications

References 22 publications

Dynamic risk-based optimization on cryptocurrencies

Dynamic risk-based optimization on cryptocurrencies

Classification of Cryptocurrency: A Review of the Literature

Blockchain Technology and Real Estate – a cluster analysis of applications in global markets in the year 2021

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