S. No. | Authors (Year) | Major findings/upside outlined | Downside outlined |
1. | Nakamoto (2008) | Introduced Bitcoins. Designated it as alternative or virtual currency to replace the traditional currency market |
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2 | Bell (2013), Androulaki et al. (2013), Brito et al. (2013), O’Dwyer et al. (2014) | 1) Classified it close to gold 2) Highly secured due to its SHA algorithm 3) Cryptocurrencies can be an effective portfolio diversifier | Potential regulatory impact due to lack of traditional monetary regime |
3 | Bradbury (2013) Crosby et al. (2016) | Provided several financial and non-financial uses of Bitcoin | 1) Cryptographic keys may be easy enough to crack due to quantum computing 2) 51% attack can jeopardize cryptocurrency market |
4 | Gervais et al. (2014), Antonopoulos (2014), Selgin (2015), | 1) A synthetic money with potential to supply the foundation for monetary regimes 2) Does not need an oversight by monetary authorities 3) Can yield high degree of macroeconomic stability | 1) Undesirable for governments to commit to an immutable cryptocurrency’s regime 2) Possibility of monetary stabilization by a synthetic commodity standard may be hypothetical |
5 | Böhme et al. (2015) | 1) Defined it as a financial asset 2) Provides privacy and anonymity | Faces several risks such as market risk, the shallow market problem, counterparty risk, transaction risk, operational risk, privacy-related risk, and legal and regulatory risks |
6 | Brandvold et al. (2015) | Information share is dynamic and evolves significantly over time. | Due to its unregulated regime, it may face crime such as money laundering |
7 | Cheah et al. (2015), Cheung et al. (2015), Folkinshteyn et al. (2015) | Exhibits speculative bubbles | Fundamental price of Bitcoin is zero. |
8 | Dwyer (2015) | 1) Prevent double spending by open source software 2) Its lowest volatilities are lesser than the highest volatilities for gold or dollars | 1) Its average volatility is higher than gold or dollars |
9 | Yermack (2015) | 1) Provides a mechanism of alternative currency 2) Its volatility is higher than widely used currencies such as dollar or pound | 1) Fails to provide a medium of exchange, a store of value and a unit of account 2) Functions like a speculative investment than a currency |
10 | Dyhrberg (2016), Shadab et al. (2014), Pieters et al. (2017) | 1) Can be used to manage the risk by risk averse investors 2) Placed between dollar and gold | Volatility is higher than gold and other stable commodities |
11 | Tschorsch et al. (2016) | Cryptocurrency markets is a new investment asset class as they are interconnected with each other and have similar patterns of connectedness with other asset classes | Speculative investment due to higher volatility |
12 | Bouri et al. (2017a), Bouri et al. (2017b) | 1) Serve as a strong bet for Asian stocks against weekly extreme down movements 2) Suggested to use for diversification purposes only | Poor hedge for economic uncertainty |
13 | Baur (2018) | 1) Displays varied return 2) Speculative trading does not contribute to unprecedented rise and subsequent crash of Bitcoin | Its volatility is attributable to speculative trading. |
14 | Catania et al. (2017) | Large computation memory and leverage effect has a substantial contribution in the volatility dynamic. |
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15 | Ciaian et al. (2018), Sovbetov (2018) | 1) BitCoin and altcoin markets are interdependent 2) In long-run, macro-financial indicators drive altcoin price formation | The virtual currency supply is exogenous and therefore plays only a limited role in the price formation. |