(with H. Kent Baker, Ehsan Nikbakht, and Sean Stein Smith )
The Emerald Handbook on Cryptoassets (forthcoming)

Since bitcoin’s introduction as the first cryptoasset in 2009, this evolving asset class has generated considerable interest and excitement among both academics and practitioners. A cryptoasset is a private digital asset that uses cryptography and serves as a medium of exchange. The most well-known cryptoassets are cryptocurrencies, such as bitcoin, that permit buying goods and services or trading them for a potential profit. However, cryptocurrencies are not like using cash and are not very “money-like.” Thus, cryptoasset owners of view them as investments and expect their value to rise.
Besides cryptocurrencies,  other types of cryptoassets include security tokens, utility tokens, stablecoins, and tokenized securities. The price of cryptoassets can be unpredictable and highly volatile, making them risky investments. Some, like bitcoin, are well-known global brands trading on exchanges around the world. Others have a much smaller market presence.
What is sure about cryptoassets is that they are here to stay. CoinMarketCap, a popular data aggregator, reports more than 6,000 different cryptoassets, with new ones created each month. The presence of multiple cryptoassets occurs because their creators optimize the underlying blockchains for various uses. The market capitalization of multiple cryptoassets exceeds $1 trillion. Those involved in cryptoassets include individual investors, major financial institutions, endowments, and hedge funds.
Cryptoassets, especially more prominent cryptocurrencies such as bitcoin, are attractive to investors because of potentially high returns. However, increased volatility accompanies high returns. Another potential benefit of including bitcoin in an investment portfolio is its low correlations with traditional assets such as stocks and bonds. Thus, including bitcoin in a portfolio offers diversification benefits. Over time, however, bitcoin’s low correlations with other asset classes are likely to rise. Bitcoin is currently an early-stage investment opportunity, and its core drivers differ from those of other assets. Despite the investment opportunities offered by bitcoin and other cryptoassets, investors entering this market face substantial challenges, including low quality of information, a lack of sound or academically defensible valuation models, regulatory uncertainty, and inadequate due diligence.