Proceedings of the 4th International Conference on Economic Management and Model Engineering, ICEMME 2022, November 18-20, 2022, Nanjing, China

Research Article

The Comparison of Pricing Models for Cryptocurrency

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  • @INPROCEEDINGS{10.4108/eai.18-11-2022.2327109,
        author={Diwen  Jiang and Junxiao  Liu and Ming  Sun},
        title={The Comparison of Pricing Models for Cryptocurrency},
        proceedings={Proceedings of the 4th International Conference on Economic Management and Model Engineering, ICEMME 2022, November 18-20, 2022, Nanjing, China},
        publisher={EAI},
        proceedings_a={ICEMME},
        year={2023},
        month={2},
        keywords={cryptocurrency; bitcoin; capm; factors model; asset pricing; fama-french factors models},
        doi={10.4108/eai.18-11-2022.2327109}
    }
    
  • Diwen Jiang
    Junxiao Liu
    Ming Sun
    Year: 2023
    The Comparison of Pricing Models for Cryptocurrency
    ICEMME
    EAI
    DOI: 10.4108/eai.18-11-2022.2327109
Diwen Jiang1,*, Junxiao Liu2, Ming Sun3
  • 1: School of Business, Shanghai DianJi University
  • 2: Accounting program at Bryant University-BITZH, Beijing Institute of Technology (Zhuhai)
  • 3: School of international education, Wuhan University of Technology
*Contact email: kuznetsovz359@gmail.com

Abstract

Since cryptocurrency went viral, it has been a profound question about how to evaluate the price value for this special currency. On account of the attributes of cryptocurrency, the factors that would be considered are different from traditional stock in asset pricing. This paper introduces four models used for asset pricing of cryptocurrency: CAPM, three-factor model, four-factor model, and n-factor model. Based on the overview of these models and research results, we draw some conclusions related to the actual applications and practicality of the models. In consideration of the cryptographic features of blockchain, we compare these results of models to figure out a better method to recognize the price changing of cryptocurrency and propose some flaws in these approaches. With the asset pricing model being modified and more factors being taken into the discussion, the accuracy of the prediction has been improved significantly step by step. At last, the complication of cryptocurrency makes it difficult to have the exact number of prices. Hence, we are looking forward to establishing perfect models to give a more accurate explanation for the price changing in the CC market with a more fully interpretation of it. These results shed light on offering a thorough look at the current model to evaluate cryptocurrency.