Whether Cryptocurrency is a Tool of Investment?

Abstract

In recent years, cryptocurrency is developing at a fast pace because of the big fluctuation in the prices of bitcoins. An increasing number of people decide to invest their assets into bitcoins or other types of cryptocurrencies. As a result, the idea of whether bitcoin is a good tool of investment has come out. This study describes, analyzes, and compares the different areas in bitcoins and finally draws a conclusion of bitcoins is tools of investment or not. Statistical measurements such as standard deviation, expected return, and skewness are adopted. The results are that bitcoins can bring a large amount of expected return, but also as well as a larger standard deviation, i.e., higher risks. Also, celebrities, such as Elon Musk, can have a huge impact on the market behavior of bitcoins, and it is easy for them to manipulate the market. The dramatic increase in trades of bitcoins encourages the development of other cryptocurrencies as well; for instance, dogecoins and SHIBA INU coins. This scenario leads to a mass of the market at a particular time so many governments attempted different policies to regulate the market. For example, China and the US are the two countries that held completely different views on cryptocurrency.