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Bitcoin as a new asset class

Asheer Jaywant Ram (School of Accountancy, University of the Witwatersrand, Johannesburg, South Africa)

Meditari Accountancy Research

ISSN: 2049-372X

Article publication date: 12 December 2018

Issue publication date: 18 February 2019




Bitcoin is the best-known cryptocurrency which currently holds the largest market capitalisation and is regarded as a standard example of a cryptocurrency. There is, however, no consensus as to the nature of the Bitcoin. The purpose of this paper is to determine whether Bitcoin represents a new asset class by building on prior research.


The prior literature on asset classes is explored in detail and then applied to the Bitcoin. Four key criteria of asset classes are discussed, namely, investability, politico-economic profile, correlation of returns and risk-reward profile. Statistical techniques are used to inform the conclusions for the third and fourth criteria.


This research finds that the Bitcoin represents a distinct alternative investment and asset class. There are significant opportunities for investment. The politico-economic profile of the decentralised and consensus-based Bitcoin is dissimilar to other asset classes. The Bitcoin shares little or no correlation with other asset classes. Using Sharpe Ratios, it is shown that the Bitcoin provides risk-adjusted returns over and above most asset classes.

Research limitations/implications

The aim of this research is to present a normative exploration into the asset class nature of the Bitcoin and, as a result, the aim is not to create positivist generalisable conclusions. This paper does not address cryptocurrencies, other than Bitcoin and does not constitute a detailed manual on modern portfolio theory.


This research adds to finance paradigm research on the Bitcoin by including a developing country perspective on Bitcoin as an asset class as prior studies have concentrated on developed country settings. Further, this research introduces recent economic data (2014 to 2017) in the form of daily observations to enhance prior understanding. It is important to understand if the Bitcoin represents an alternative investment and new asset class as this may affect investment decisions.



The author would like to extend thanks to Warren Maroun and the anonymous reviewers for their insightful comments on earlier versions of this paper. Thanks are also extended to Lelys Maddock for her invaluable editorial services.


Ram, A.J. (2019), "Bitcoin as a new asset class", Meditari Accountancy Research, Vol. 27 No. 1, pp. 147-168.



Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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