Proceedings of 3rd International Symposium on Social Science (ISSS 2017)

Bitcoin in China: Pure Risk Generator or Potential Investment Instrument?

Authors
Xiang Li
Corresponding Author
Xiang Li
Available Online May 2017.
DOI
https://doi.org/10.2991/isss-17.2017.56How to use a DOI?
Keywords
Bitcoin, Detrended Ratio, Diversification Benefit, Investment Instrument.
Abstract
In December 2013 the People's Bank of China announced the restriction of Bitcoin from being involved in any services offered by financial institutions in China, fearing that the speculative risks inherent in Bitcoin is too new for Chinese investors and may endanger the national financial system. This article reviews the Bitcoin's evolvement both as currency and as investment asset around the world. Also, the regulatory treatment for Bitcoin in America is discussed. Then I used detrended ratios to compare the volatility of Bitcoin market and China's stock market, concluding that the risks inherent in Bitcoin are not unacceptable for Chinese investors. Moreover, I searched into the relationship between Bitcoin return and some fundamental economic variables, finding that Bitcoin doesn't have enough correlation with the national economic system to depress investors further during an economic downturn and that Bitcoin actually has excellent diversification benefit as portfolio component.
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This is an open access article distributed under the CC BY-NC license.

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Proceedings
3rd International Symposium on Social Science (ISSS 2017)
Part of series
Advances in Social Science, Education and Humanities Research
Publication Date
May 2017
ISBN
978-94-6252-341-8
ISSN
2352-5398
DOI
https://doi.org/10.2991/isss-17.2017.56How to use a DOI?
Open Access
This is an open access article distributed under the CC BY-NC license.

Cite this article

TY  - CONF
AU  - Xiang Li
PY  - 2017/05
DA  - 2017/05
TI  - Bitcoin in China: Pure Risk Generator or Potential Investment Instrument?
BT  - 3rd International Symposium on Social Science (ISSS 2017)
PB  - Atlantis Press
SN  - 2352-5398
UR  - https://doi.org/10.2991/isss-17.2017.56
DO  - https://doi.org/10.2991/isss-17.2017.56
ID  - Li2017/05
ER  -