The Comparison of Pricing Models for Cryptocurrency

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.