Why Digital Assets No Longer Sit Outside Asset Pricing Theory

Cryptocurrency From Curiosity to Capital Allocation

For more than a decade, cryptocurrencies occupied an uncomfortable space in finance. They were too large to ignore, too volatile to trust, and too unconventional to fit neatly into classical asset pricing frameworks. Early narratives oscillated between utopian visions of decentralized money and dismissive claims of pure speculation. What has changed is not just market size, now approaching four trillion dollars at its peak, but the accumulation of empirical evidence. The question is no longer whether cryptocurrencies are real assets, but whether they behave like an asset class in a measurable, systematic, and investable sense.

The recent comprehensive survey by Borri, Liu, Tsyvinski, and Wu (https://www.quantpaper.com/paper/fe28347e-3aa5-464f-ae4c-dd38ad5c3798) provides a decisive answer. By organizing more than a decade of data into ten stylized empirical facts, the study shows that cryptocurrencies increasingly resemble traditional assets in their risk adjusted performance and factor structure, while retaining unique characteristics that set them apart.