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Yale Professors Positive On Bitcoin - A Valuable Addition To Your Portfolio

Yale Professors Positive On Bitcoin - A Valuable Addition To Your Portfolio
  • One of the things that have been cutting off Bitcoin’s growth over the past year or so is mainstream adoption or the lack thereof. 
  • Some professors are pushing forward the movement for all crypto investors to allocate Bitcoin to their investment portfolios.
  • The two professors go onto highlight that the value forecast for Bitcoin and other major altcoins have the potential to be quite powerful.

One of the things that have been cutting off Bitcoin’s growth over the past year or so is mainstream adoption or the lack thereof. We were so close to it in 2017 but since the flagship cryptocurrency has had its legitimacy and credibility ripped from its core. 

Some big economic professors at a major Ivy League university are now pushing forward the movement for all crypto investors to allocate Bitcoin, as well as other altcoins, to their investment portfolios.

In a recent paper from the two Yale economics professors, Yukun Liu and Aleh Tsyvinski highlight the significant price action that the new asset class has experienced is one of a kind and is completely unique, especially when you compare it to other markets. According to them, this is what makes it a valuable addition to an investors portfolio.

The paper starts off with the following:

“We establish that the risk-return tradeoff of cryptocurrencies (Bitcoin, Ripple, and Ethereum) is distinct from those of stocks, currencies, and precious metals. Cryptocurrencies have no exposure to most common stock market and macroeconomic factors,” they note, later specifying that BTC should “occupy 6% of every portfolio.”

Returns

The two professors go onto highlight that the value forecast for Bitcoin and other major altcoins have the potential to be quite powerful. 

They further go onto explain:

“Specifically, we determine that there is a strong time-series momentum effect and that proxies for investor attention strongly forecast cryptocurrency returns… The returns of cryptocurrency can be predicted by two factors specific to its markets – momentum and investors attention.”

It will be interesting to see how this situation plays out. For more news on this and other crypto updates, keep it with CryptoDaily!

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