Analysis of the Effects of Including Bitcoin in Investment Portfolios

Currently, the popularity of cryptocurrencies as an investment asset is growing, bitcoin is the most attractive among them, since it is the oldest instrument in this market. In this paper, the authors examined the advantages and disadvantages of the cryptocurrency in question, the history of its creation. The analysis of the effectiveness of the inclusion of the digital asset in question into the structure of an investment portfolio consisting of assets of various classes was carried out using the Harry Markowitz portfolio theory. The relevance of the chosen topic is confirmed due to the popularity of digital assets in modern conditions. The existing gaps in the legal regulation of their turnover are gradually being filled, and institutional investors are increasingly investing in the purchase of cryptocurrencies. The results of the study indicate a significant increase in the profitability of the investment portfolio after the addition of bitcoin, which can in some proportion become an effective substitute for investments in the stock market of American companies. The analysis revealed a high degree of mutual correlation between the dynamics of the bitcoin price and the S&P 500 index. The construction of the regression equation and the calculation of the determination coefficient give reason to believe that the dynamics of the S&P 500 index by 92.25% correlate with fluctuations of the price of bitcoin, which is due, apparently, to the attractiveness of the new and tempting investors with the profitability of the cryptocurrency market. The results obtained, on the one hand, indicate the possibility of using technical and fundamental analysis tools to work with crypto assets, on the other hand, the convergence of the behavior of this type of asset with changes in traditional market benchmarks.