Blockchain technology, investor sentiment, and economic stress levels are significant predictors of bitcoin returns, according to a groundbreaking paper from Illinois Institute of Technology researchers that provides empirical evidence to help guide investors, economists, and academics.
Blockchain technology, investor sentiment, and economic stress levels are significant predictors of bitcoin returns, according to a groundbreaking paper from Illinois Institute of Technology researchers that provides empirical evidence to help guide investors, economists, and academics.
Sang Baum “Solomon” Kang, associate professor of finance at Illinois Tech’s Stuart School of Business and co-author of the paper, also found that the cryptocurrency is detached from economic fundamentals and therefore may not effectively serve as a diversifier or safe-haven asset. Additionally, Kang reported that returns on commodities, securities, and other assets do not predict bitcoin returns well.
The paper, titled “What Information Variables Predict Bitcoin Returns? A Dimension-Reduction Approach,” was published in The Journal of Alternative Investments.
