Bitcoin market and Ethereum market are two highly disruptive cryptocurrencies looking to leverage blockchain technologies to drive innovation across numerous industries. The objective was to analyze each cryptocurrency to develop the ideal investment strategy for a $1,000,000 investment which must be held for five years without any additional trading.
To develop an ideal investment strategy, we analyzed both currencies. After looking at the qualitative similarities and differences between each currency, we analyzed the historical performances of each and extrapolated these values to form a five-year projection. Conversations with industry professionals helped to identify the most probable and impactful factors for the future demand of both currencies. After incorporating our results and accounting for variance, we ran simulations to predict the expected values given a range of inputs and factors.
After weighing these findings, the appropriate investment ratio proved to be 69:31 for Bitcoin and Ethereum respectively. Bitcoin offered a higher expected value, but the volatility and speculative nature of cryptocurrencies indicated a need for diversification across platforms.
