We consider a revenue-optimizing auctioneer in single-dimensional environments with matroid feasibility constraints. Akbarpour and Li (2020) argue that any revenue-optimal, truthful, and credible mechanism requires unbounded communication. Recent works (Ferreira and Weinberg, 2020; Essaidi et al., 2022; Chitra et al., 2024) circumvent their impossibility for the single-item setting through the use of cryptographic commitments and blockchains. We extend their results to matroid feasibility constraints. At a high level, the two-round Deferred-Revelation Auction (DRA) discussed by Ferreira and Weinberg (2020) and Chitra et al., (2024) requires each bidder to submit a deposit, which is slashed upon presenting verifiable evidence indicating a deviation from the behaviour prescribed by the mechanism. We prove that the DRA satisfies truthfulness, credibility and revenue-optimality for all matroid environments when bidders' values are drawn from $α$-strongly regular distributions for $α> 0$. Further, we argue that the DRA is not credible for any feasibility constraint beyond matroids and for any smaller deposits than suggested by previous literature even in single-item environments. Finally, we modify the Ascending Deferred-Revelation Auction (ADRA) for single-item settings proposed by Essaidi et al., (2022) for arbitrary bidder value distributions. We implement a deferred-revelation variant of the deferred-acceptance auction for matroids due to Bikhchandani et al., (2011), which requires the same bounded communication as the ADRA.
Like all religious traditions, Buddhism must continually respond to emerging technologies while remaining grounded in its ethical and philosophical foundations. One such technology is cryptocurrencyâa decentralized, blockchain-based financial innovation that has reshaped economic life by reducing reliance on traditional banking systems, enhancing user privacy, and offering a hedge against inflation and state-based monetary control. Its adoption has grown rapidly, including among Buddhist communities, where it is used in a variety of ways: as a medium of exchange, as an investment vehicle, and as a means of generating income through mining. For many practitioners, cryptocurrency represents a new and complex challenge in aligning financial management with Buddhist ethical values. For example, critics point to its environmental footprint, its association with illicit trade and financial crime, and its speculative nature, which some argue parallels gamblingâan activity explicitly discouraged in Buddhist precepts. This article examines the ethics of cryptocurrency from multiple Buddhist perspectives, drawing on canonical sources such as the PÄli NikÄyas, monastic codes (Vinaya), and recent interpretations by contemporary Buddhist teachers and scholars. It also engages with relevant secular critiques to contextualize Buddhist concerns. The article concludes by proposing a normative framework to assist both lay practitioners and members of the monastic sangha in evaluating the ethical permissibility of engaging with cryptocurrency, guided by key principles such as non-harming, right livelihood, and mindful consumption.
Akinde Michael Ogunmolu, Emonena Patrick Obrik-Uloho, Oluwaseun Oladeji Olaniyi, Aisha Temitope Arigbabu · 5 authors
This study investigates the systemic propagation of cyber risks between traditional financial institutions (TradFi) and decentralized finance (DeFi) infrastructures, focusing on oracles as critical conduits for contagion. Using publicly available datasetsâincluding MITRE ATT&CKÂź for Financial Services, the Global Cybersecurity Index (GCI), and the REKT.news exploit archiveâthe study applies frequency analysis, logistic regression, time-series event studies, and Principal Component Analysis with cluster modeling to quantify institutional vulnerabilities, model breach likelihood, and evaluate governance impacts. Empirical findings show that API interconnectivity and DeFi exposure increase breach probabilities by up to 3.7 times, while countries in Cluster 0, such as Singapore and Estonia, exhibit governance indices 24â28 points above average, correlating with lower systemic risks. Oracle-related incidents triggered over 150% volatility surges in TradFi-linked tokens like USDC and DAI, demonstrating oraclesâ role in cross-domain cyber risk transmission. The study recommends harmonizing cybersecurity governance frameworks across centralized and decentralized sectors, mandating periodic audits of oracle infrastructures, and developing integrated real-time threat monitoring systems to contain spillovers. These policy measures, alongside expanded cybersecurity workforce development, are essential to mitigate evolving cross-sector vulnerabilities. By combining rigorous empirical modeling with actionable recommendations, this research offers practical insights for policymakers, regulators, and cybersecurity professionals to strengthen resilience in the increasingly interconnected global financial ecosystem.
This research examines the impact of Bitcoin adoption as a cryptocurrency on financial stability in Indonesia. It analyses potential systemic hazards and how banks might effectively handle these risks. Bank Indonesia, the central bank, has articulated apprehensions over the volatility of Bitcoin and its potential ramifications on the nation's monetary aggregates and financial stability. The study seeks to elucidate the implications of cryptocurrency integration into the Indonesian financial system. The research utilises a quantitative approach, integrating a data analysis method. We gather data from financial institutions, regulatory authorities, and Bitcoin users in Indonesia to assess the impact of Bitcoin on financial stability. The findings suggest that, although Bitcoin presents potential advantages like enhanced financial inclusion and innovation, it also entails considerable dangers. These encompass market volatility, cybersecurity concerns, and regulatory obstacles. The study identifies critical areas where banks must improve risk management practices to mitigate them. A significant component of this research is the identification of specialised risk management solutions especially adapted to the Indonesian setting, such as the integration of local regulatory frameworks with international standards and best practices.
The convergence of lightweight cryptography and blockchain technology offers a transformative approach to trust management in the Internet of Things (IoT), particularly within resource-constrained environments. Traditional security models fall short in addressing the dual demands of scalability and efficiency, prompting the need for hybrid frameworks that integrate cryptographic minimalism with decentralized trust mechanisms. This chapter presents a comprehensive design and evaluation of hybrid lightweight blockchain-cryptography frameworks tailored for secure, energy-efficient, and privacy-preserving trust management in distributed IoT networks. It explores system design trade-offs, secure data aggregation techniques, and immutable storage strategies while introducing edge-assisted trust computation to offload intensive operations. Advanced privacy-preserving methods, such as zero-knowledge proofs and differential privacy, are incorporated to mitigate data exposure risks inherent to transparent blockchain infrastructures. The proposed architecture was aligned with practical deployment scenarios and threat models, delivering scalable, low-latency, and tamper-resistant trust infrastructures for heterogeneous IoT ecosystems. The chapter closes by identifying key research gaps and future directions necessary to standardize and optimize such hybrid frameworks across diverse application domains.
ABSTRACT Using a textâbased measure of peer opinions constructed from cryptocurrencyârelated social media posts, we find that peer opinions contain valuable information about the prices of cryptocurrency options. Bitcoin options exhibit a volatility smile, which becomes steeper when peer opinions become bearish. The riskâneutral skewness of Bitcoin returns implied by options prices becomes more negative in times of bearish opinions. The predictability of peer opinions for Bitcoin option prices remains robust after controlling for momentum, volatility, demand pressures, news effects, and other sentiment measures, and exhibits no evidence of reversal over time. This effect is pronounced when Bitcoin attracts high investor attention, more diverse opinions about Bitcoin are expressed on social media, and Bitcoin options are more actively traded. We find similar results for Ethereum options.
This study aims to demystify the link between Bitcoin pricing and the associated electricity costs, constituting the most significant cost in mining Bitcoin. The article revisits the typical Cost-price (electricity consumption -Bitcoin price) relationship in the context of Bitcoin. The research question is answered using the Nonlinear Autoregressive Distributed Lag (NARDL) Model complemented with Multiple Breakpoints Least Squares Regression (MBLSR). The study analyzes monthly data from various sources from March 2017 to September 2023 and is segregated into four different regimes. The convergence in both techniques provides rigour and robustness to the results. The findings reveal the asymmetric relationship where Bitcoin's energy consumption does not increase significantly with a positive change in Bitcoin Price. This behaviour is counterintuitive given that electricity consumption is expected to increase in a high price period because of more profit margins. The flooding of accumulated Bitcoins by the miners in high price periods may be a contributing reason for no significant increase in the electricity consumption in mining Bitcoins. Conversely, the fall in Bitcoin prices will reduce the energy consumed by the Bitcoin Network conforming to the anticipated pattern. This behaviour is in stark contradiction to the Law of Supply and is well explained by the Bitcoin miners' operational strategy in the Boom and Recession period. Relying on the asymmetric behaviour, investors can revamp their strategy to make profits in the market. In addition, findings suggest policymakers try to limit credit accessibility to miners in the bust to reduce the colossal energy consumption of Bitcoin.
As interest in the practical use of cryptocurrencies continues to grow, so does the focus on the (perceived) privacy and anonymity of users within this domain. Despite this attention, there is a notable absence of standardized definitions for these terms. This article aims to address this gap by exploring the various interpretations of privacy, anonymity, and related concepts in the context of cryptocurrencies. Drawing from a thorough review of existing literature, we propose practical definitions for both privacy and anonymity. Utilizing these definitions, we introduce an ontology designed to streamline future research, identify knowledge gaps, and facilitate clearer communication in the field.
Open access
Blockchain Technology Applications and Security
Advanced Steganography and Watermarking Techniques
This is an accepted article with a DOI pre-assigned that is not yet published. This essay attempts to test the ways 19th century spectatorship is viewed and interpreted in contemporary artistic practices by exploring the impact of the early decades of photography through the lens of ongoing developments in contemporary visual technology. The central question is: how might a contemporaneous object like the NFT, or non-fungible token, allow us to think through a historical object such as the daguerreotype? The first half of the essay outlines the conceptual grounds for this analysis, through a critical reading of Errki Huhtamoâs âsymptomaticâ approach to the practice of media archeology. In the second half of the essay, a new methodology â based on Slavoj ĆœiĆŸekâs âshort-circuitâ comparative model â is proposed and applied as what I term a âmedia postmortemâ and its supporting concept of âsymptomatic plasticityâ. The broader aims of the essay are twofold: (1) propose a new approach to the study of art historical phenomenon that, going further than media archeology, interrogates a chronological chain of events with a view to identifying repeated structural patterns, symptomatic eruptions that open up a circular rather than linear conception of (art historical) time; (2) map a new direction for the study of images by way of a more intense, diagnostically acute, focus on the question of materiality.
Blockchain technology has reshaped digital finance, enabling decentralized applications (DApps) on platforms like Ethereum. However, these innovations have also facilitated fraudulent schemes such as Ponzi schemes, which deceive users with false promises of high returns. These schemes cause financial losses and weaken trust in blockchain systems. Existing detection methods face key challenges, including limited labeled data, over-reliance on transaction history, and failure to identify scams early. To address these issues, we propose a framework that combines static and dynamic features of smart contracts for early Ponzi detection. Our feature set includes opcode patterns, developer behavior, temporal trends, and metadata, crafted to work independently of transaction data. We enhance feature representation using TF-IDF, CountVectorizer, and Word2Vec for deeper semantic understanding. These features are used to train multiple machine learning and deep learning models such as Random Forest, XGBoost, CNNs, and BiGRUs. A stacking ensemble with a neural meta-learner integrates predictions for improved performance. The model achieves 99% accuracy and an AUC of 0.9522 on a curated Ethereum dataset, handling class imbalance through oversampling and synthetic data generation. We also employ SHAP for model explainability, offering insights into feature importance and promoting transparency. Our framework is scalable and supports real-time monitoring of contracts, helping prevent financial damage by detecting fraud at deployment. This solution enhances the security and reliability of decentralized finance platforms.
The fast and unbridled growth of digital content presents enormous difficulties for intellectual property (IP) rights management. Conventional systems find it difficult with the natural digital complexity, simplicity of replication, and broad illegal use. This paper uses a methodical literature review and an analysis of more than 39 research publications released between 2018 and 2024 to handle this. These were assembled using especially pertinent keywords taken from main scholarly databases. Our study of these published works reveals that the IP recording and verification process is much enhanced by blockchain's distributed, open, immutable architecture. Smart contracts automate agreements; non-fungible tokens (NFTs) offer special ownership proof and the Interplanetary File System (IPFS) guarantees consistent, distributed storage for digital assets. Still, this paper emphasizes continuing problems including user adoption, legal uncertainty, and scalability constraints. Future studies have to aggressively close these gaps by creating scalable, legally strong, and easily Blockchain solutions. Moreover, incorporating artificial intelligence will be crucial for their widespread and efficient application.
Survival modeling predicts the time until an event occurs and is widely used in risk analysis; for example, it's used in medicine to predict the survival of a patient based on censored data. There is a need for large-scale, realistic, and freely available datasets for benchmarking artificial intelligence (AI) survival models. In this paper, we derive a suite of 16 survival modeling tasks from publicly available transaction data generated by lending of cryptocurrencies in Decentralized Finance (DeFi). Each task was constructed using an automated pipeline based on choices of index and outcome events. For example, the model predicts the time from when a user borrows cryptocurrency coins (index event) until their first repayment (outcome event). We formulate a survival benchmark consisting of a suite of 16 survival-time prediction tasks (FinSurvival). We also automatically create 16 corresponding classification problems for each task by thresholding the survival time using the restricted mean survival time. With over 7.5 million records, FinSurvival provides a suite of realistic financial modeling tasks that will spur future AI survival modeling research. Our evaluation indicated that these are challenging tasks that are not well addressed by existing methods. FinSurvival enables the evaluation of AI survival models applicable to traditional finance, industry, medicine, and commerce, which is currently hindered by the lack of large public datasets. Our benchmark demonstrates how AI models could assess opportunities and risks in DeFi. In the future, the FinSurvival benchmark pipeline can be used to create new benchmarks by incorporating more DeFi transactions and protocols as the use of cryptocurrency grows.
Direct acyclic graph (DAG)-based ledgers and distributed consensus algorithms have been proposed for use in the Internet of Things (IoT). The DAG-based ledgers have many advantages over single-chain blockchains, such as low resource consumption, low transaction fee, high transaction throughput, and short confirmation delay. However, the scalability of the DAG consensus has not been comprehensively verified on a large scale. This paper explores the scalability of DAG consensus within the low-to-high load regime (L2HR) using the tangle model, where L2HR characterizes the transition from a phase of low network load to another phase of high network load. In particular, we determine the average number of tips in the tangle in L2HR when adopting the uniform random tip selection (URTS) and rigorously prove that using the tangle model, the average number of tips at the end of L2HR converges to a constant. We also analyze the probability that a transaction in L2HR becomes an abandoned tip, the approximate average time required for the network load to transition from low load regime (LR) to high load regime (HR), and the average time required for a tip being approved for the first time in L2HR. All analytics are verified by numerical simulations.
As Artificial Intelligence systems evolve from monolithic models to ecosystems of specialized agents, the need for standardized communication protocols becomes increasingly critical. This paper introduces MOD-X (Modular Open Decentralized eXchange), a novel architectural framework proposal for agent interoperability that addresses key limitations of existing protocols. Unlike current approaches, MOD-X proposes a layered architecture with a Universal Message Bus, thorough state management, translation capabilities, and blockchain-based security mechanisms. We present MOD-X's architecture, compare it with existing protocols, and demonstrate its application through a worked example how it enables integration between heterogeneous specialist agents (agents with different architectures, vendors, capabilities, and knowledge representations--including rule-based systems, neural networks, symbolic reasoning engines, and legacy software with agent wrappers). MOD-X's key innovations include a publish-subscribe communication model, semantic capability discovery, and dynamic workflow orchestration--providing a framework that bridges theoretical formalism with practical implementation. This architecture addresses the growing need for truly decentralized, interoperable agent ecosystems that can scale effectively without the need for central coordination.
Ethereum smart contracts operate in a concurrent environment where multiple transactions can be submitted simultaneously. However, the Ethereum Virtual Machine (EVM) enforces sequential execution of transactions within each block to prevent conflicts arising from concurrent access to the same state variables. Although this approach guarantees correct behavior, it limits the ability of validators to leverage multi-core architectures for faster transaction processing, thus restricting throughput. Existing solutions introduce concurrency by allowing simultaneous transaction execution combined with runtime conflict detection and rollback mechanisms to maintain correctness. However, these methods incur significant overhead due to continuous conflict tracking and transaction reversion. Recently, alternative approaches have emerged that aim to predict conflicts statically, before execution, by analyzing smart contract code for potential transaction interactions. Despite their promise, there is a lack of comprehensive studies that examine static conflict detection and its broader implications in specific smart contracts. This paper fills this important gap by proposing a novel static analysis method to detect potential transaction conflicts in Ethereum smart contracts. Our method identifies read-write, write-write, and function call conflicts between transaction pairs by analyzing state variable access patterns in Solidity contracts. We implement a tool that parses contract code and performs conflict detection. Evaluation on a dataset of real-world Ethereum smart contracts demonstrates that our approach achieves high precision in identifying potential conflicts. By enabling proactive conflict detection, our tool supports further design of transaction scheduling strategies that reduce runtime failures, enhance validator throughput, and contribute to blockchain scalability.
The presented study examines the problems of regulating the cryptocurrency market in Russia and other countries, as well as measures to prevent attempts at tax evasion and illegal transactions with cryptocurrencies. Special attention is paid to the identification of possible tax evasion schemes in the implementation of these operations. Goal. To consider the main problems of regulating the cryptocurrency market, which sometimes make it impossible for regulators, including tax authorities, to control this market. And also to study the measures that have been taken by regulators from various countries around the world, including Russia, to combat tax evasion. Tasks. Consider the concept of "cryptocurrencies" in various jurisdictions, analyze the main difficulties for tax and other regulatory authorities to control transactions with cryptocurrencies; identify the main tax evasion schemes, as well as examine the measures taken by various countries in the fight against tax evasion. Methodology. The study used general scientific methods, in addition to which an analysis of the current legislative bases regulating the cryptocurrency market was conducted, as well as creating conditions for preventing attempts to evade taxes and commit illegal transactions with cryptocurrencies. This included a study of both national and international regulations, which made it possible to assess the legal framework and potential risks associated with the current regulations. This comprehensive approach to the analysis of legislation has helped to identify current issues and shortcomings in regulation, as well as to offer recommendations for improving the regulatory environment. Results. In the course of studying the approach to defining cryptocurrencies, as well as considering the main characteristics of cryptocurrencies, it was found that the concept of "cryptocurrency" requires a single definition to establish the legal status of this digital currency. There is a need to create conditions to prevent illegal transactions with cryptocurrencies, to operate effective investor protection mechanisms, to strengthen consumer protection, and to improve cooperation with international partners. Conclusions. The conducted research indicates the need to change the legislative framework for the cryptocurrency market, taking into account the existing positive experience of various countries. The study also revealed the need to strengthen international cooperation to exchange information on operations in the cryptocurrency market in order to prevent attempts at tax evasion.
In this article, we explore the complexities surrounding token issuance within blockchain networks and their integration with decentralized exchanges (DEXs). With the swift evolution of cryptocurrency and blockchain technologies, token issuance has become a prevalent means of funding initiatives and creating novel digital assets. This journey involves tackling a spectrum of technical and organizational hurdles, ranging from choosing the right token standard to crafting, testing, and deploying smart contracts on the Ethereum blockchain. Further, we explore the integration of issued tokens with decentralized exchanges, highlighting the importance of such platforms in enabling token trading without reliance on centralized intermediaries. The technical solutions required for this integration, along with considerations of the unique aspects of exchange protocols, are critically analyzed. We pay special attention to the ERC-20 standard for token creation, detailing the process of smart contract development and deployment on the Ethereum network. Additionally, the advantages and limitations of integrating tokens with DEXs are examined, providing a comprehensive understanding of both the opportunities and challenges within the rapidly evolving digital asset ecosystem. This study extends the current understanding of token dynamics by incorporating an in-depth analysis of scalability challenges, cross-chain interoperability, and the evolving regulatory landscape affecting token issuance and trading. By offering practical recommendations for overcoming identified hurdles, this research guides practitioners and policymakers in navigating the complexities of the decentralized finance (DeFi) space, making a significant contribution to the field of blockchain technology and digital finance.
Wallets are access points for the digital economys value creation. Wallets for blockchains store the end-users cryptographic keys for administrating their digital assets and enable access to blockchain Web3 systems. Web3 delivers new service opportunities. This chapter focuses on the Web3 enabled release of value through the lens of wallets. Wallets may be implemented as software apps on smartphones, web apps on desktops, or hardware devices. Wallet users request high security, ease of use, and access of relevance from their wallets. Increasing connectivity, functionality, autonomy, personal support, and offline capability make the wallet into the user's Universal Access Device for any digital asset. Through wallet based services, the owner obtains enhanced digital empowerment. The new Web3 solutionareas, Identity and Decentralisation, enable considerable societal effects, and wallets are an integral part of these. One example is self sovereign identity solutions combined with wallet borne AI for personalised support, empowering the enduser beyond anything previously known. Improved welfare is foreseen globally through enlarged markets with collaborative services with drastically lowered transaction costs compared to today, the expected vastly increased levels of automation in society necessitate enhanced enduser protection. As wallets are considered a weak spot for security, improving overall security through blockchains is essential.
South Korea's City P illustrates how lofty goals of digital solidarity can falter when challenged by local governance realities. Drawing on Hansmann's ownership theory, collaborative governance concepts, and platform cooperativism, we conducted a qualitative case study involving policy documents, independent assessments, and 11 in-depth interviews with residents, officials, and technology developers. Findings reveal a marked disconnect between the initiative's stated emphasis on community co-ownership and the actual power dynamics that largely favored government agencies and external firms. Although blockchain and integrated digital tools were meant to enhance transparency and inclusivity, stakeholders--especially elderly residents--experienced confusion and mistrust. We argue that genuine collaboration in digital solidarity economies requires not only robust technical designs but also culturally resonant ownership structures, substantive inclusion of local voices, and transparent governance mechanisms. The City P case underscores the necessity of addressing heterogeneous digital capacities, aligning funding and incentives with grassroots empowerment, and mitigating performative participation to ensure meaningful and sustainable outcomes in community-based digital innovation.
The rapid advancement of creating Zero-Knowledge (ZK) programs has led to the development of numerous tools designed to support developers. Popular options include being able to write in general-purpose programming languages like Rust from Risc Zero. Other languages exist like Circom, Lib-snark, and Cairo. However, developers entering the ZK space are faced with many different ZK backends to choose from, leading to a steep learning curve and a fragmented developer experience across different platforms. As a result, many developers tend to select a single ZK backend and remain tied to it. This thesis introduces zkSDK, a modular framework that streamlines ZK application development by abstracting the backend complexities. At the core of zkSDK is Presto, a custom Python-like programming language that enables the profiling and analysis of a program to assess its computational workload intensity. Combined with user-defined criteria, zkSDK employs a dynamic selection algorithm to automatically choose the optimal ZK-proving backend. Through an in-depth analysis and evaluation of real-world workloads, we demonstrate that zkSDK effectively selects the best-suited backend from a set of supported ZK backends, delivering a seamless and user-friendly development experience.
This study discusses a cryptocurrency model that is in accordance with Islamic sharia principles. The study was conducted using a qualitative method involving interviews with experts in digital technology and Islamic finance, as well as secondary data analysis from various literatures. The results of the study show differences in the views of scholars regarding the permissibility of cryptocurrency, where some state it is halal, some are haram, and others are neutral. The elements that make cryptocurrencycontroversial in sharia include uncertainty, excessive speculation, and the absence of supporting assets. This study offers a halal cryptocurrency model that is free from gharar, maysir, has supporting assets, is under the supervision of sharia authorities, is transparent, safe, free from usury, and is supported by fatwas. This model aims to provide a halal alternative for Muslims in transacting using modern cryptocurrency technology.
Penelitian ini membahas kedudukan cryptocurrency dalam sistem hukum perdata Indonesia. Cryptocurrency adalah aset digital yang tidak berwujud namun memiliki nilai ekonomi dan dapat dialihkan. Hal ini menimbulkan pertanyaan mengenai pengakuannya sebagai benda dalam KUH Perdata. Sistem hukum Indonesia masih mendasarkan konsep benda pada bentuk fisik, sehingga belum mampu menjangkau keberadaan aset digital. Penelitian ini menggunakan pendekatan yuridis normatif, konseptual, dan komparatif untuk menelaah hal tersebut. Hasil penelitian menunjukkan adanya kekosongan hukum yang menghambat kepastian dan perlindungan hukum bagi pemilik cryptocurrency. Selain itu, belum terdapat mekanisme pembuktian kepemilikan dan penyelesaian sengketa yang efektif. Negara-negara seperti Jepang, Singapura, dan Uni Eropa telah lebih dahulu mengatur secara jelas aset digital ini. Oleh karena itu, pembaruan hukum perdata Indonesia sangat diperlukan untuk mengakomodasi perkembangan teknologi digital.
Ferdous Ahmmed, Boakye Yam Boadi, Michael Guillemette
This study examined the relationship between margin trading and cryptocurrency investment using data from the 2018 and 2021 waves of the National Financial Capability Study (NFCS) Investor Survey. Guided by behavioral finance theory, which suggests that cognitive biases may influence risk-taking, the study explored whether margin loan use and margin calls are associated with higher cryptocurrency participation. Margin loans are inherently risky, as they must be repaid regardless of investment outcomes, and margin calls are triggered when an investorâs equity falls below a required threshold. The results showed a positive and statistically significant association between margin activity and cryptocurrency investment. Specifically, individuals with a margin loan were 17 percentage points more likely to invest in cryptocurrency, while those who have experienced a margin call were 23 percentage points more likely. Given the extreme volatility of cryptocurrencies, these results highlight the increased risks investors face when using leverage in speculative markets. The analysis is based on cross-sectional data from U.S. investors; therefore, the findings should be interpreted as correlational rather than causal.
Halilibrahim Gökgöz, Aamir Aijaz Syed, Hind Alnafisah, Ahmed Jeribi
The recent economic turmoil and the increasing volatility of bitcoins have necessitated the need for exploring safe-haven assets for bitcoins. In this quest, the present study aims to investigate the safe haven for bitcoins by examining the dynamic relationship between bitcoins, gold, foreign exchange, and stablecoins. This is achieved by calculating hedge ratios and portfolio weight ratios for various asset classes, by employing adaptive-based techniques such as generalized orthogonal generalized autoregressive conditional heteroscedasticity, corrected dynamic conditional correlation, corrected asymmetric dynamic conditional correlation, and asymmetric dynamic conditional correlation under various market and time-varying conditions. The empirical estimate reveals that all the selected asset classes are effective risk diversifiers for bitcoins. However, among all the asset classes, as per the hedge and portfolio weight ratio, Japanese yen, stablecoin for Japanese yen and Great Britain Pound, and Crypto Holding Frank Token (lowest-cost hedging strategies) are the most effective risk diversifiers when compared with bitcoins. Moreover, while considering external economic shocks, the empirical estimate posits that stablecoins are more stable risk diversifiers compared to the asset class they represent. Furthermore, in terms of the bivariate portfolio analysis formed with bitcoin, this study concludes that the weight of bitcoin is more stable when combined with gold, tether gold, Euro, Great Britain Pound, Swiss franc, and Japanese Yen. Thus, these assets are attractive for long-term investment strategies. This study provides investors and policymakers with significant insight into understanding safe-haven assets for bitcoinâs volatility and constructing a flexible portfolio that is dependent on the investment timeline and the prevailing market conditions.