Two professors in economics at Yale University believe that investors should have bitcoins in their portfolios.

In a recent article, Yale University economics professors Yukun Liu and Aleh Tsyvinski note that cryptocurrencies are a nascent asset class that dramatically differs from other stock market assets in that it is not so dependent on external factors. The study entitled “Risks and Returns of Cryptocurrency” states:

“We establish that the risk-return tradeoff of cryptocurrencies (Bitcoin, Ripple, and Ethereum) is distinct from those of stocks, currencies, and precious metals. Cryptocurrencies have no exposure to most common stock market and macroeconomic factors. They also have no exposure to the returns of currencies and commodities.”

According to Liu and Tsyvinski, bitcoins should occupy up to “6.1% of investing portfolio.”

“If the investor believes Bitcoin will continue to do as well as the past seven years, she should hold about 6.1 percent share of Bitcoin in her portfolio. Even if the investor believes Bitcoin will only have half of its historical performance going forward, she should still hold about 3.1 percent share of Bitcoin in her portfolio.”

Economists also believe that cryptocurrencies can be used not only as a tool for hedging risks in traditional markets. According to two professors, the rate of bitcoin and other digital assets in the future may increase significantly.

“The returns of cryptocurrency can be predicted by two factors specific to its markets – momentum and investors attention. Our findings call into question popular explanations that supply factors such as mining costs, price-to-”dividend” ratio, or realized volatitility are useful for predicting the behavior of cryptocurrency returns.”

In particular, the researchers found that a surge in investors attention to the analyzed cryptocurrencies (Bitcoin, Ethereum and Ripple) in social networks can serve as an indicator of exchange rate growth on the horizon of one or two weeks for bitcoin, one week for Ripple or one to six weeks for Ethereum.

“We construct proxies for investor attention and show that high investor attention predicts high future returns over 1-2 week horizons for Bitcoin, a 1-week horizon for Ripple, and 1-, 3-, and 6-week horizons for Ethereum. For example, a one-standard-deviation increase in the Google search for the word “Bitcoin” yields a 2.3 percent increase in the 2-week ahead Bitcoin returns.”

According to the authors of the article, the popular explanations of the bitcoin price, based on the cost of mining or the ratio of its price to dividends or realized volatility, have no reason. However, there is some evidence that returns are exposed to the stock returns of Advanced Micro Devices, Inc. (AMD), one of the main manufacturers of specialized mining hardware.