Categories: Bitcoin

Yale Economists Share Strategies to Strongly Forecast Bitcoin Returns


At the time when the cryptocurrency industry has recorded a loss of more than $30 billion, two Yale economists believe traders can strongly forecast the volatile market using “potential predictors for cryptocurrency returns.”

Aleh Tsyvinski and Yukun Liu published a new study, titled “Risks and Returns of Cryptocurrency,” after researching factors that could accurately predict the cryptocurrency returns. The study found that cryptocurrencies have low exposure to the macroeconomic factors that usually influence stock, currency, and commodity markets. However, there are still some strategies that are common to both traditional and cryptocurrency price trends.

To find them, Tsyvinski and Liu analyzed the historical data of top coins, including Pictured: An image excerpt from the Yale Study, “RISKS AND RETURNS OF CRYPTOCURRENCY.”

Overall, the magnitude of the outcomes derived from Bitcoin statistics was higher than those for traditional asset classes.

As for Ripple and Ethereum, their returns had a higher mean return and standard deviation than those of Bitcoin. However, their Sharpe ratios, the average profit earned, was somewhat comparable to the Sharpe ratios of Bitcoin returns.

Featured image from Shutterstock.

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