A Model of the Optimal Selection of Crypto Assets

Bartolucci, Silvia; Kirilenko, Andrei A.

doi:10.2139/ssrn.3578450

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A Model of the Optimal Selection of Crypto Assets

25 Pages Posted: 12 May 2020

See all articles by Silvia Bartolucci

Silvia Bartolucci

University College London - Department of Computer Science; Imperial College Business School; University College London - Centre for Blockchain Technologies

Andrei A. Kirilenko

University of Cambridge - Finance

Date Written: April 17, 2020

Abstract

We propose a modelling framework for the optimal selection of crypto assets. We assume that crypto assets can be described according to two features: security (technological) and stability (governance). We simulate optimal selection decisions of investors, being driven by (i) their attitudes towards assets’ features, (ii) information about the adoption trends, and (iii) expected future economic benefits of adoption. Under a variety of modelling scenarios – e.g. in terms of composition of the crypto assets landscape and investors’ preferences – we are able to predict the subset of the most widely adopted crypto assets and their features.

Keywords: blockchain, crypto assets, dynamics

JEL Classification: C02, C63, E42, E5

Suggested Citation: Suggested Citation

Bartolucci, Silvia and Kirilenko, Andrei A., A Model of the Optimal Selection of Crypto Assets (April 17, 2020). Available at SSRN: https://ssrn.com/abstract=3578450 or http://dx.doi.org/10.2139/ssrn.3578450