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An In-Depth Analysis of Bitcoin: Is it Speculative

O'Rielley, Isaac H
http://orcid.org/0009-0005-5367-3465
http://rave.ohiolink.edu/etdc/view?acc_num=walshhonors1713470179958763

Abstract Details

2024, Bachelor of Arts, Walsh University, Honors.
Currently, in the world of investing, the accurate classification grade for Bitcoin has become a current debate. Due to Bitcoin being incapable of having a bottom line and no real demand, many argue that it should not be considered an investment-grade or speculative-grade asset. As a result, this study calls for the creation of a third investment grade, called the greater fool grade, to be created to appropriately classify Bitcoin. The goal of this study is to provide sufficient evidence that shows Bitcoin is unlike any investment and speculative asset, supporting the creation of the greater fool grade to accurately categorize the asset. This was done by analyzing the risk and return characteristics of Bitcoin through three different analyses. The first analysis conducted was a comparative analysis of Bitcoin's continuous bubble cycle. In this analysis, Bitcoin was compared to the five most notorious bubbles in history and displayed comparable traits to the studied historical asset bubbles. An applied analysis of statistical significance was also conducted. In this analysis, Bitcoin and a combined 18 different investment-grade and speculative-grade assets' financial measurements were analyzed and compared over multiple time periods, which showed that a majority of Bitcoin’s financial measurements were vastly different and more volatile than those of the other studied assets. Lastly, a statistical hypothesis test with 110 regressions was conducted to see if Bitcoin’s total risk was statistically distinct from the investment and speculative assets. These regressions compared the total risk of Bitcoin to the total risk of a combined 18 different investment-grade and speculative-grade assets. Upon completion of this model, it was found that there was no significance in correlation of Bitcoin’s total risk when compared to the total risk of the other measured assets. The results of this study show overwhelming support surrounding the creation of the greater fool grade for Bitcoin, which could contribute to alike studies in the future.
Dr. Marc Fusaro (Advisor)
46 p.
Economic History; Economic Theory; Economics; Finance
Bitcoin; Cryptocurrency; Greater Fool Theory; Investment-grade Assets; Speculative-grade Assets; Greater Fool Grade; Investing; Asset Bubbles

Recommended Citations

Citations

  • O'Rielley, I. H. (2024). An In-Depth Analysis of Bitcoin: Is it Speculative [Undergraduate thesis, Walsh University]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=walshhonors1713470179958763

    APA Style (7th edition)

  • O'Rielley, Isaac. An In-Depth Analysis of Bitcoin: Is it Speculative. 2024. Walsh University, Undergraduate thesis. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=walshhonors1713470179958763.

    MLA Style (8th edition)

  • O'Rielley, Isaac. "An In-Depth Analysis of Bitcoin: Is it Speculative." Undergraduate thesis, Walsh University, 2024. http://rave.ohiolink.edu/etdc/view?acc_num=walshhonors1713470179958763

    Chicago Manual of Style (17th edition)

walshhonors1713470179958763
204
© 2024, all rights reserved.
This open access ETD is published by Walsh University Honors Theses and OhioLINK.