New Yale Study Suggests Including At least 6% Bitcoin in your Portfolio

by | Aug 9, 2018 | Bitcoin, Cryptocurrency, Cryptocurrency News

Yale | Bitcoin | Bitcoin Investment | Investment Portfolio | Research | Yale Professor

Aleh Tsyvinski, an Economics Professor at Yale University published a new research paper that recommends that Bitcoin should be an imperative part of one’s portfolio. He insists on Bitcoin’s inclusion whether one is a cryptocurrency enthusiast or not.

According to Professor Tsyvinski, an optimal constructed portfolio should have Bitcoin at least 6 percent of one’s portfolio. Those who are less enthusiastic about it should hold 4 percent of it. Whether you are in support of the world’s most popular cryptocurrency or not, Bitcoin should ideally comprise a minimum of 1 percent of your portfolio just for diversification purposes.

A similar conclusion was drawn by another scholar – Professor Dragan Boscovic from the Arizona State University. Speaking about his research, Boscovic noted:

“Institutional investors are recognizing this new asset as a valued investment opportunity; this will encourage individual investors. It will also encourage consumers and small shops to start trading in cryptocurrency.”

Are Cryptocurrencies better than Traditional stocks ?

In his study titled, Risks and Returns of Cryptocurrencies, Tsyvinski compares cryptocurrencies to traditional stocks and bonds outlining a very positive feature of the former. He used the Sharpe’s ratio to demonstrate that despite their increased volatility, digital currencies show higher potential for return. Notably, only Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) were examined by the professor for his study.

Quite contradictory to Tsivinsky’s observation, Robert Shiller, a noted economist and Nobel Prize Winner claimed earlier in May that    Bitcoin is a failed experiment and “another example of faddish human behavior”. Meanwhile, Bitcoin (BTC) $6373.45 +0.39% has been struggling as of late. While Ethereum $6373.45 +0.39% and Ripple $6373.45 +0.39% have fared even worse amid a prolonged bear market through 2018.

Arshmeet Hora

The idea of expressing one’s views and reviews through words is beyond intriguing. What started as a creative let out has now become a passion and a profession for Arshmeet K Hora. In her own words ” with every word, every article that I write, my passion towards this medium has grown stronger.”  Arshmeet covers latest crypto news and updates as well as what happening new revolving around Blockchain Technology.

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