The emergence of financial technology in the last 10 years has created a new type of asset that is Cryptocurrency. Cryptocurreny offers a small transaction fee without involving a third party in its transaction and the ability to make its users anonymous. It became one of its main selling points and was quickly accepted widely in the financial world. Cryptocurrency price movements become volatile. For examples, Bitcoin issued in 2009, the value is not more than USD 10, but in early June 2017, Bitcoin is worth about USD 3000 (Bloomberg, July 5th, 2017). Many investors are interested to invest in Cryptocurrency, especially investors with high risk tolerance. This study aims to find the effects of Cryptocurrency on well-formed portfolios. The assets we use are Foreign Currency, Commodity, Stock, and ETF. The Cryptocurrency we will use is Bitcoin, Ripple and Litecoin. Using the Modern Portfolio Theory approach, we can create an investment portfolio. The results show that the portfolio with Cryptocurrency indeed increases the effectiveness of the portfolio in two ways. The first is to minimize the standard deviation and the second is to create more allocation options for investors to choose from. The optimum allocation of Cryptocurrency is from 5% to 20% depending on the risk tolerance of the investor.
| Published in | Journal of Finance and Accounting (Volume 5, Issue 6) |
| DOI | 10.11648/j.jfa.20170506.14 |
| Page(s) | 229-238 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2018. Published by Science Publishing Group |
Cryptocurrentcy, Bitcoin, Ripple, Litecoin, Investment Portfolio, Markowitz
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APA Style
Yanuar Andrianto, Yoda Diputra. (2018). The Effect of Cryptocurrency on Investment Portfolio Effectiveness. Journal of Finance and Accounting, 5(6), 229-238. https://doi.org/10.11648/j.jfa.20170506.14
ACS Style
Yanuar Andrianto; Yoda Diputra. The Effect of Cryptocurrency on Investment Portfolio Effectiveness. J. Finance Account. 2018, 5(6), 229-238. doi: 10.11648/j.jfa.20170506.14
AMA Style
Yanuar Andrianto, Yoda Diputra. The Effect of Cryptocurrency on Investment Portfolio Effectiveness. J Finance Account. 2018;5(6):229-238. doi: 10.11648/j.jfa.20170506.14
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Download@article{10.11648/j.jfa.20170506.14,
author = {Yanuar Andrianto and Yoda Diputra},
title = {The Effect of Cryptocurrency on Investment Portfolio Effectiveness},
journal = {Journal of Finance and Accounting},
volume = {5},
number = {6},
pages = {229-238},
doi = {10.11648/j.jfa.20170506.14},
url = {https://doi.org/10.11648/j.jfa.20170506.14},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20170506.14},
abstract = {The emergence of financial technology in the last 10 years has created a new type of asset that is Cryptocurrency. Cryptocurreny offers a small transaction fee without involving a third party in its transaction and the ability to make its users anonymous. It became one of its main selling points and was quickly accepted widely in the financial world. Cryptocurrency price movements become volatile. For examples, Bitcoin issued in 2009, the value is not more than USD 10, but in early June 2017, Bitcoin is worth about USD 3000 (Bloomberg, July 5th, 2017). Many investors are interested to invest in Cryptocurrency, especially investors with high risk tolerance. This study aims to find the effects of Cryptocurrency on well-formed portfolios. The assets we use are Foreign Currency, Commodity, Stock, and ETF. The Cryptocurrency we will use is Bitcoin, Ripple and Litecoin. Using the Modern Portfolio Theory approach, we can create an investment portfolio. The results show that the portfolio with Cryptocurrency indeed increases the effectiveness of the portfolio in two ways. The first is to minimize the standard deviation and the second is to create more allocation options for investors to choose from. The optimum allocation of Cryptocurrency is from 5% to 20% depending on the risk tolerance of the investor.},
year = {2018}
}
TY - JOUR T1 - The Effect of Cryptocurrency on Investment Portfolio Effectiveness AU - Yanuar Andrianto AU - Yoda Diputra Y1 - 2018/03/09 PY - 2018 N1 - https://doi.org/10.11648/j.jfa.20170506.14 DO - 10.11648/j.jfa.20170506.14 T2 - Journal of Finance and Accounting JF - Journal of Finance and Accounting JO - Journal of Finance and Accounting SP - 229 EP - 238 PB - Science Publishing Group SN - 2330-7323 UR - https://doi.org/10.11648/j.jfa.20170506.14 AB - The emergence of financial technology in the last 10 years has created a new type of asset that is Cryptocurrency. Cryptocurreny offers a small transaction fee without involving a third party in its transaction and the ability to make its users anonymous. It became one of its main selling points and was quickly accepted widely in the financial world. Cryptocurrency price movements become volatile. For examples, Bitcoin issued in 2009, the value is not more than USD 10, but in early June 2017, Bitcoin is worth about USD 3000 (Bloomberg, July 5th, 2017). Many investors are interested to invest in Cryptocurrency, especially investors with high risk tolerance. This study aims to find the effects of Cryptocurrency on well-formed portfolios. The assets we use are Foreign Currency, Commodity, Stock, and ETF. The Cryptocurrency we will use is Bitcoin, Ripple and Litecoin. Using the Modern Portfolio Theory approach, we can create an investment portfolio. The results show that the portfolio with Cryptocurrency indeed increases the effectiveness of the portfolio in two ways. The first is to minimize the standard deviation and the second is to create more allocation options for investors to choose from. The optimum allocation of Cryptocurrency is from 5% to 20% depending on the risk tolerance of the investor. VL - 5 IS - 6 ER -
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