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Risk Analysis of Cryptocurrency as an Alternative Asset Class

2017; Springer Nature; Linguagem: Inglês

10.1007/978-3-662-54486-0_16

2197-1706

Li Guo, Xiaoxiao Li,

Financial Risk and Volatility Modeling

The purpose of this study is to analyze the risk of cryptocurrencies, as an alternative investment. In particular, we find the wealth distribution of the cryptocurrency, evaluate its corresponding effects on the market and analyze other risk factors resulting in the death of altcoins. The paper concludes that the closer the right tail of wealth distribution approaching the Power-Law model, the more stable the market will be. This result is quite useful for investors to make decisions when investing in cryptocurrencies.