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PREDICTING FUTURE CRYPTOCURRENCY INVESTMENT TRENDS BY CONJOINT ANALYSIS

Year 2018, , 321 - 330, 30.12.2018
https://doi.org/10.17261/Pressacademia.2018.999

Abstract

Purpose- Trade goods have been used as exchange mediums since the first humans. A thousand years ago currency was invented, and it

became the dominant exchange medium in today’s world. The history of money did not end with the invention of fiat currency, such as US

Dollar or Euro. Cryptocurrency is the new development. It is not a trade good, nor a fiat money. “It is a new, experimental kind of money.”

In this study our purpose is to analyze the factors influencing investors’ decision making on investment in cryptocurrencies by using

conjoint analysis. Studies suggest that some attributes of cryptocurrencies affect decisions of investors. In this study, the attributes at

different levels related to investors’ expectations on cryptocurrencies are examined.

Methodology- In this study, conjoint analysis has been conducted. Conjoint method is a statistical analysis method and by using this

method researchers determine the value of the attributes of a product or a feature for its consumers. Conjoint analysis is a method for

analyzing preferences of customers; it is a useful tool for predicting and determining responses of customers to new product features and

totally new products. In this case customers are investors and the new product is cryptocurrencies. Conjoint analysis has several types,

choice based conjoint analysis is one of them and it is the preferred method for most of the researchers.

Findings- Data collected for the study has been analyzed by using Marketing Engineering for Excel software. The findings of the study

indicate that profitability, bookkeeping and security are the most important attributes which influence expectations of investors in

cryptocurrencies. Five attributes with five levels each are chosen. It is predicted that these attributes are the most important indicators of

investor behavior. According to research findings, most important attribute for investors is profitability. This study confirms that the

majority of investors have high profit expectation from crypto currencies. But study results also include some unexpected findings.

Anonymity is not one of the main concerns for investors and almost equal number of investors prefers very high and very low level of

bookkeeping.

Conclusion- The conjoint analysis gives a clear view on what investors expect from cryptocurrencies. The results show the attributes to

improve when developing a cryptocurrency.

References

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  • Aung, Y. N., & Tantidham, T. (2018). Review of Ethereum: Smart home case study. In Proceeding of 2017 2nd International Conference on Information Technology, INCIT 2017. http://doi.org/10.1109/INCIT.2017.8257877
  • Bonneau, J., Miller, A., Clark, J., Narayanan, A., Kroll, J. A., & Felten, E. W. (2015). SoK: Research perspectives and challenges for bitcoin and cryptocurrencies. In Proceedings - IEEE Symposium on Security and Privacy. http://doi.org/10.1109/SP.2015.14
  • Buterin, V. (2014). A Next-Generation Smart Contract and Decentralized Application Platform - Ethereum White Paper. Ethereum Project White Paper.
  • Chohan, U. (2017). Cryptocurrencies: A Brief Thematic Review. SSRN.
  • Conjoint Tutorial. (2018) Marketing Engineering for Excel Software
  • Corbet, S., Lucey, B., & Yarovaya, L. (2018). Datestamping the Bitcoin and Ethereum bubbles. Finance Research Letters. http://doi.org/10.1016/j.frl.2017.12.006
  • Dourado, E., & Brito, J. (2014). Cryptocurrency. The New Palgrave Dictionary of Economics. http://doi.org/10.1057/10.1057/9780230226203.3924
  • Elbahrawy, A., Alessandretti, L., Kandler, A., Pastor-Satorras, R., & Baronchelli, A. (2017). Evolutionary dynamics of the cryptocurrency market. Royal Society Open Science. http://doi.org/10.1098/rsos.170623
  • Glaser, F., & Bezzenberger, L. (2015). Beyond Cryptocurrencies - A Taxonomy Of Decentralized Consensus. ECIS. http://doi.org/10.18151/7217326
  • Green, P. E., & Srinivasan, V. (1978). Conjoint Analysis in Consumer Research: Issues and Outlook. Journal of Consumer Research. http://doi.org/10.1086/208721
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  • Iwamura, M., Kitamura, Y., & Matsumoto, T. (2014). Is Bitcoin the Only Cryptocurrency in the Town? Economics of Cryptocurrency And Friedrich A. Hayek. SSRN.
  • Jiang, Z., & Liang, J. (2016). Cryptocurrency Portfolio Management with Deep Reinforcement Learning. ArXiv.
  • Komşuoğlu Yılmaz, Nurgün, Boydaş Hazar, Hülya (2018). Determining the Factors Affecting Investors’ Decision-Making Process in Cryptocurrency Investments, Istanbul Finance Congress, November 1-2, 2018, Istanbul, Turkey.
  • Lee, D. K. C., Guo, L., & Wang, Y. (2018). Cryptocurrency: A new investment opportunity? Journal of Alternative Investments. http://doi.org/10.3905/jai.2018.20.3.016
  • Leising, M., & Robinson, E. (2018). Ripple Wants XRP to Be Bitcoin for Banks. If Only the Banks Wanted It. Bloomberg.
  • Nakamoto, S. (2008). Bitcoin: A Peer-to-Peer Electronic Cash System. Www.Bitcoin.Org. http://doi.org/10.1007/s10838-008-9062-0
  • Ong, B., Lee, T. M., Li, G., & Chuen, D. L. K. (2015). Chapter 5 – Evaluating the Potential of Alternative Cryptocurrencies. Handbook of Digital Currency. http://doi.org/10.1016/B978-0-12-802117-0.00005-9
  • Pfitzmann, A., & Marit Hanse. (2008). Anonymity, Unlinkability, Unobservability, Pseudonymity, and Identity Management – A Consolidated Proposal for Terminology. Journal of Chemical Information and Modeling, 148(9), 164–179. https://doi.org/10.1017/CBO9781107415324.004
  • Phillip, A., Chan, J., & Peiris, S. (2018). A new look at Cryptocurrencies. Economics Letters. http://doi.org/10.1016/j.econlet.2017.11.020
  • Pustišek, M., & Kos, A. (2018). Approaches to Front-End IoT Application Development for the Ethereum Blockchain. In Procedia Computer Science. http://doi.org/10.1016/j.procs.2018.03.017
  • Puthal, D., Malik, N., Mohanty, S. P., Kougianos, E., & Das, G. (2018). Everything You Wanted to Know about the Blockchain: Its Promise, Components, Processes, and Problems. IEEE Consumer Electronics Magazine, 7(4), 6–14. https://doi.org/10.1109/MCE.2018.2816299
  • Schwartz, D., Youngs, N., & Britto, A. (2014). The Ripple protocol consensus algorithm. Ripple Labs Inc White Paper.
  • Sompolinsky, Y., & Zohar, A. (2013). Accelerating Bitcoin’s Transaction Processing. Fast Money Grows on Trees, Not Chains. IACR Cryptology EPrint Archive.
  • Stellar News, https://cointelegraph.com/tags/stellar, (26.11.2018)
  • Stellar.org, https://www.stellar.org/, (26.11.2018)
  • Wikipedia, What is Cryptocurrency, https://en.wikipedia.org/wiki/Cryptocurrency, (26.11.2018)
  • What is EOS, https://coincentral.com/what-is-eos, (26.11.2018)
  • White, L. H. (2015). The market for cryptocurrencies. Cato Journal. http://doi.org/10.2139/ssrn.2538290
  • Wood, G. (2014). Ethereum: a secure decentralised generalised transaction ledger. Ethereum Project Yellow Paper. http://doi.org/10.1017/CBO9781107415324.004
  • Yli-Huumo, J., Ko, D., Choi, S., Park, S., & Smolander, K. (2016). Where is current research on Blockchain technology? - A systematic review. PLoS ONE. http://doi.org/10.1371/journal.pone.0163477
Year 2018, , 321 - 330, 30.12.2018
https://doi.org/10.17261/Pressacademia.2018.999

Abstract

References

  • Atzei, N., Bartoletti, M., & Cimoli, T. (2017). A survey of attacks on Ethereum smart contracts (SoK). In Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics). http://doi.org/10.1007/978-3-662-54455-6_8
  • Aung, Y. N., & Tantidham, T. (2018). Review of Ethereum: Smart home case study. In Proceeding of 2017 2nd International Conference on Information Technology, INCIT 2017. http://doi.org/10.1109/INCIT.2017.8257877
  • Bonneau, J., Miller, A., Clark, J., Narayanan, A., Kroll, J. A., & Felten, E. W. (2015). SoK: Research perspectives and challenges for bitcoin and cryptocurrencies. In Proceedings - IEEE Symposium on Security and Privacy. http://doi.org/10.1109/SP.2015.14
  • Buterin, V. (2014). A Next-Generation Smart Contract and Decentralized Application Platform - Ethereum White Paper. Ethereum Project White Paper.
  • Chohan, U. (2017). Cryptocurrencies: A Brief Thematic Review. SSRN.
  • Conjoint Tutorial. (2018) Marketing Engineering for Excel Software
  • Corbet, S., Lucey, B., & Yarovaya, L. (2018). Datestamping the Bitcoin and Ethereum bubbles. Finance Research Letters. http://doi.org/10.1016/j.frl.2017.12.006
  • Dourado, E., & Brito, J. (2014). Cryptocurrency. The New Palgrave Dictionary of Economics. http://doi.org/10.1057/10.1057/9780230226203.3924
  • Elbahrawy, A., Alessandretti, L., Kandler, A., Pastor-Satorras, R., & Baronchelli, A. (2017). Evolutionary dynamics of the cryptocurrency market. Royal Society Open Science. http://doi.org/10.1098/rsos.170623
  • Glaser, F., & Bezzenberger, L. (2015). Beyond Cryptocurrencies - A Taxonomy Of Decentralized Consensus. ECIS. http://doi.org/10.18151/7217326
  • Green, P. E., & Srinivasan, V. (1978). Conjoint Analysis in Consumer Research: Issues and Outlook. Journal of Consumer Research. http://doi.org/10.1086/208721
  • Hacked.com (2018), www.hacked.com, (22.10.2018)
  • Iansiti, M., Lakhani, K. R., ethereum, Ethereum community, Kugler, L., Tapscott, A., & Tapscott, D. (2017). What is Ethereum? — Ethereum Homestead 0.1 documentation. Harvard Buisness Review. http://doi.org/10.1016/j.annals.2005.11.001
  • Iwamura, M., Kitamura, Y., & Matsumoto, T. (2014). Is Bitcoin the Only Cryptocurrency in the Town? Economics of Cryptocurrency And Friedrich A. Hayek. SSRN.
  • Jiang, Z., & Liang, J. (2016). Cryptocurrency Portfolio Management with Deep Reinforcement Learning. ArXiv.
  • Komşuoğlu Yılmaz, Nurgün, Boydaş Hazar, Hülya (2018). Determining the Factors Affecting Investors’ Decision-Making Process in Cryptocurrency Investments, Istanbul Finance Congress, November 1-2, 2018, Istanbul, Turkey.
  • Lee, D. K. C., Guo, L., & Wang, Y. (2018). Cryptocurrency: A new investment opportunity? Journal of Alternative Investments. http://doi.org/10.3905/jai.2018.20.3.016
  • Leising, M., & Robinson, E. (2018). Ripple Wants XRP to Be Bitcoin for Banks. If Only the Banks Wanted It. Bloomberg.
  • Nakamoto, S. (2008). Bitcoin: A Peer-to-Peer Electronic Cash System. Www.Bitcoin.Org. http://doi.org/10.1007/s10838-008-9062-0
  • Ong, B., Lee, T. M., Li, G., & Chuen, D. L. K. (2015). Chapter 5 – Evaluating the Potential of Alternative Cryptocurrencies. Handbook of Digital Currency. http://doi.org/10.1016/B978-0-12-802117-0.00005-9
  • Pfitzmann, A., & Marit Hanse. (2008). Anonymity, Unlinkability, Unobservability, Pseudonymity, and Identity Management – A Consolidated Proposal for Terminology. Journal of Chemical Information and Modeling, 148(9), 164–179. https://doi.org/10.1017/CBO9781107415324.004
  • Phillip, A., Chan, J., & Peiris, S. (2018). A new look at Cryptocurrencies. Economics Letters. http://doi.org/10.1016/j.econlet.2017.11.020
  • Pustišek, M., & Kos, A. (2018). Approaches to Front-End IoT Application Development for the Ethereum Blockchain. In Procedia Computer Science. http://doi.org/10.1016/j.procs.2018.03.017
  • Puthal, D., Malik, N., Mohanty, S. P., Kougianos, E., & Das, G. (2018). Everything You Wanted to Know about the Blockchain: Its Promise, Components, Processes, and Problems. IEEE Consumer Electronics Magazine, 7(4), 6–14. https://doi.org/10.1109/MCE.2018.2816299
  • Schwartz, D., Youngs, N., & Britto, A. (2014). The Ripple protocol consensus algorithm. Ripple Labs Inc White Paper.
  • Sompolinsky, Y., & Zohar, A. (2013). Accelerating Bitcoin’s Transaction Processing. Fast Money Grows on Trees, Not Chains. IACR Cryptology EPrint Archive.
  • Stellar News, https://cointelegraph.com/tags/stellar, (26.11.2018)
  • Stellar.org, https://www.stellar.org/, (26.11.2018)
  • Wikipedia, What is Cryptocurrency, https://en.wikipedia.org/wiki/Cryptocurrency, (26.11.2018)
  • What is EOS, https://coincentral.com/what-is-eos, (26.11.2018)
  • White, L. H. (2015). The market for cryptocurrencies. Cato Journal. http://doi.org/10.2139/ssrn.2538290
  • Wood, G. (2014). Ethereum: a secure decentralised generalised transaction ledger. Ethereum Project Yellow Paper. http://doi.org/10.1017/CBO9781107415324.004
  • Yli-Huumo, J., Ko, D., Choi, S., Park, S., & Smolander, K. (2016). Where is current research on Blockchain technology? - A systematic review. PLoS ONE. http://doi.org/10.1371/journal.pone.0163477
There are 33 citations in total.

Details

Primary Language English
Journal Section Articles
Authors

Nurgun Komsuoglu Yilmaz 0000-0002-9050-9796

Hulya Boydas Hazar This is me 0000-0002-7115-1899

Publication Date December 30, 2018
Published in Issue Year 2018

Cite

APA Yilmaz, N. K., & Hazar, H. B. (2018). PREDICTING FUTURE CRYPTOCURRENCY INVESTMENT TRENDS BY CONJOINT ANALYSIS. Journal of Economics Finance and Accounting, 5(4), 321-330. https://doi.org/10.17261/Pressacademia.2018.999

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