Using HDM to Evaluate Investment Potential of Cryptocurrencies

Abstract

Cryptocurrencies have become a viable form of investment over the last year, but because this is such a new form of investment determining the potential value of a new blockchain-based business is difficult. The objective of this paper is to determine key criteria with weights that can be used in assessing cryptocurrencies to determine if they are worth investment. I will use the Hierarchical Decision Model (HDM) methodology to obtain expert opinions on the importance of cryptocurrency attributes. The HDM model will generate the data for my final analysis. For reference data regarding cryptocurrency markets and values I will be using the popular website coinmarketcap.com. Future study of this topic could include adding and testing more parameters, comparing the weights to real data over several years and determining indicators for innovation potential for cryptocurrencies. It would be interesting to study how to automate the collection of this data and use these weights as part of a recommendation engine for cryptocurrency investment.