Cryptocurrency Returns

Abstract

One of the most significant innovations in the world of finance has been the creation and evolvement of cryptocurrencies. These digital means of exchange have been the focus of extensive news coverage, especially the Bitcoin, with a primary focus on the tremendous potential return and the high level of accompanying risk. In this chapter, we examine the risk-return pattern for an array of cryptocurrencies, contrasting the pattern with those of conventional currency and equity investments. We find the measures of cryptocurrency returns and risk to be a very high multiple of those of conventional investments, and the pattern is determined to be robust relative to the time frame. Consequently, cryptocurrencies are determined to provide an alternative to investors that involves tremendously high risk and return.

Is Cryptocurrency Risky as An Investment Instrument? Analysis of Return and Risk with A Comparison of Sharia Stocks

“…Based on table 2, the standard deviation value for cryptocurrency is 0.2278989 or have a total risk of 22.8% during the 2015-2021 period with an average risk of 0.091991 or 9.2% per month, which is greater than the standard deviations of sharia stocks which only 0.0408103 or 4.1% with an average risk of 0.018268 or 1.8% per month, indicating that cryptocurrency risk is higher than sharia stocks. In line with research from (Cudd et al, 2018;Huda & Hambali, 2020;Rufino, 2019) which states that the risk of Cryptocurrency is very high compared to other investment instruments. So that risk-averse investors must be careful by limiting cryptocurrency instruments in their portfolios, because it can increase the possibility of loss (Bakry et al, 2021).…”

Risk and Return of NFT, Metaverse, Cryptocurrency, and NFT’s Relation with IP

“…Among others, a possible sanctuary for the transfer of unlawfully obtained cash Furthermore, the historically high returns generated by cryptocurrency investments throughout their short lifespans have piqued the curiosity of both speculators and casual onlookers. The potential rewards are great when compared to more traditional assets like foreign currencies and the stock market, and the hazards are proportionately bigger (Cudd et al 2018).…”