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How to identify the cryptocurrencies that gonna yield the highest return?

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To identify cryptocurrencies that are likely to yield the highest return, investors should consider factors such as Trading Volume, Price Volatility, Market Capitalization, technical analysis indicators, extreme positive returns, and multifactor models. High Trading Volume and Price Volatility have been shown to have a significant positive effect on Cryptocurrency Returns . Utilizing technical analysis indicators and applying advanced forecasting methods like LSTM neural networks can improve prediction accuracy for cryptocurrencies like Bitcoin, Ethereum, and Ripple . Extreme positive returns within the previous month have a positive and statistically significant relationship with expected returns on cryptocurrencies, indicating their potential for high yields . Additionally, multifactor models based on capitalization indicators, trading volumes, and momentum can help identify cryptocurrencies with high return potential .

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Open access•Journal Article•DOI Lottery-like preferences and the MAX effect in the cryptocurrency market Melisa Ozdamar, Levent Akdeniz, Ahmet Sensoy - Show less +2 more 01 Sep 2021-Financial Innovation 6 Citations	Identify cryptocurrencies with the highest return potential by focusing on those with extreme positive returns, particularly the ones with the maximum daily return within the previous month (MAX).
Book Chapter•DOI Predicting Cryptocurrency Price Returns by Using Deep Learning Model of Technical Analysis Indicators V. V. Kovalev 01 Jan 2023	Utilize a deep learning LSTM model with technical analysis indicators as inputs to forecast price returns of cryptocurrencies like Bitcoin, Ethereum, and Ripple for identifying those with potentially high returns.
Open access•Journal Article•DOI Factor Models of Cryptocurrency Returns: Financial Theory Approach Elena Sinelnikova-Muryleva, Maria Kuznetsova, K. Shilov - Show less +2 more 01 Jan 2022-Экономическая политика	Factor models based on capitalization, trading volumes, and momentum can help identify cryptocurrencies with potentially high returns. Diversification and market risk dynamics are also crucial for selection.
Expectile hidden Markov regression models for analyzing cryptocurrency returns Beatrice Foroni, Luca Merlo, Lea Petrella - Show less +2 more 23 Jan 2023 1 Citations	Expectile hidden Markov regression models can be utilized to analyze cryptocurrency returns and identify those likely to yield the highest returns based on the research paper.
Journal Article•DOI The Determinants of Cryptocurrency Returns Ratna Juwita, Anis Wahyu Intan Maris - Show less +1 more 27 Jun 2023-Jurnal Ilmu Keuangan dan Perbankan: JIKA	Choose cryptocurrencies with high Trading Volume and Price Volatility for potentially high returns. Market Capitalization does not significantly impact returns. Be cautious of the associated risks.

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What are the determinants of crypto currency value?5 answersThe determinants of cryptocurrency value include internal and external factors. Internal dynamics are related to the economic and technological infrastructure of cryptocurrencies. External factors that affect value include popularity, security, volume, inflation, tax, crypto exchange accidents, perception, speculations/manipulations, and news. Research has shown that the market capitalization of Bitcoin is positively related to its price and inflation rate, and negatively related to the price of Ethereum. The computational power of Bitcoin miners, gold prices, velocity of Bitcoin in circulation, and the price of Ethereum have also been identified as determinants of Bitcoin price. Additionally, the aggregate computational power employed in mining, the rate of unit production, and the cryptologic algorithm used for the protocol are drivers of cryptocurrency value. The determinants of cryptocurrency returns vary among different cryptocurrencies, with some similarities in the impact of technical determinants.

How can cryptocurrencies be used to optimize portfolios?5 answersCryptocurrencies can be used to optimize portfolios by leveraging the complex inter-dependencies between different cryptocurrencies in the market. Network methods can be employed to identify highly decorrelated cryptocurrencies, which can then be used to create diversified portfolios using portfolio optimization theories such as Markowitz Portfolio Theory. By constructing portfolios with a mix of cryptocurrencies, investors can potentially achieve higher returns and reduce risks compared to investing in single coins. Past price correlations can be used to reduce risk and improve the performance of crypto portfolios. Different portfolio strategies, such as copula particle swarm optimization (CPSO) and PROMETHEE II based multicriteria approach, can be employed to select the best cryptocurrencies for the portfolio based on various factors such as return, risk, volume, and market capitalization. The dynamic relationship among cryptocurrencies can be examined using vector error correction models to understand their diversification benefits.

What kind of assets are cryptocurrency?5 answersCryptocurrencies are considered alternative assets that share many features of physical alternative assets such as fine art or wine. They can also be classified as intangible assets or stocks based on international and national accounting regulations. Cryptocurrencies have emerged as a new asset class that does not fit into traditional investment styles or asset pricing models. They have the potential to be used as a medium of exchange or a form of money, but can also be treated as commodities or digital assets. In terms of legal protections, crypto assets are considered "intangible movable objects" and can be governed by material guarantees such as pledges and fiduciary guarantees. Overall, cryptocurrencies are a unique type of asset that combines elements of alternative assets, intangible assets, and commodities.

Which analysis application of cryptocurrency is the most effective?5 answersThe most effective analysis application of cryptocurrency is the one that evaluates cryptocurrencies based on social metrics using machine learning and other tools. This application provides investors with a different lens to view cryptocurrencies and helps them make more thorough decisions. Another approach is the pool complexity approach, which uses social activity in the internet, trading parameters, technical indicators, and other cryptocurrency data to choose the optimal technology. According to the analysis, the most effective and promising cryptocurrency is EOS cryptocurrency, which has the lowest complexity and commission level among the analyzed digital currencies. Additionally, graphical technical analysis can be used to forecast the movement of asset prices in the cryptocurrency market. This approach involves analyzing price movement, pattern identification, support/resistance levels identification, and the use of indicators and bars analysis. Overall, these analysis applications provide valuable insights for investors in the cryptocurrency market.

Best cryptocurrency to invest in?5 answersCryptocurrencies have been extensively researched, but there is no consensus on the best cryptocurrency to invest in. Traditional investment styles do not appear to be successful in this asset class, and cryptocurrencies are independent from the macroeconomic environment. However, some cryptocurrencies have shown hedging and safe-haven properties against down movements in the S&P 500 and its equity sectors. Bitcoin, Ripple, and Stellar are safe-havens for all US equity indices, while Litecoin and Monero are safe-havens for the aggregate US equity index and selected sectors. Principal components analysis reveals a complex return generating process for cryptocurrencies, and predicting cryptocurrency movements with machine learning algorithms is marginally attractive. Factors such as hash rate, difficulty, market capitalization, and daily coins mined can determine cryptocurrency prices. In the GCC region, most respondents have heard about cryptocurrencies but do not own them, and investing in cryptocurrency is seen as riskier and less profitable than the stock market.

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