Open Access Indonesia Journal of Social Sciences Vol 6 Issue 4 2023

Open Access Indonesia Journal of

Social Sciences
Journal Homepage: https://journalsocialsciences.com/index.php/OAIJSS

Potential Analysis of Bitcoin Cryptocurrency as a Future Investment Asset: A

Systematic Literature Review
Silvia Jesika1*, Widya Pratiwi1, Deni Handani1, Hamirul1
1 Setih Setio Institute of Administration and Health, Muarabungo, Indonesia

ARTICLE INFO ABSTRACT

Keywords: Despite this promising potential, it is important to remember that investing
Analysis in Bitcoin also involves risk. The price of Bitcoin is very volatile, and its value
Bitcoin can change dramatically in a short amount of time. In addition, regulations
regarding cryptocurrencies are still unclear in many countries, and
Cryptocurrency
regulatory changes could affect the price and adoption of Bitcoin. Security is
Investment assets also an important factor, as Bitcoin can be vulnerable to cyberattacks and
theft. This study aimed to conduct studies related to the potential of bitcoin
*Corresponding author: cryptocurrency as an asset for future investment as well as the potential
risks that exist in this asset. Literature search efforts are carried out by
Silvia Jesika searching on search engines using certain keywords. Articles that match the
inclusion criteria are reviewed in depth. Bitcoin's potential as a future
investment alternative is highly dependent on factors such as value growth,
E-mail address: institutional adoption, and developments in blockchain technology.
silviajesika12@gmail.com Nonetheless, it is important to be aware of the risks associated with investing
in cryptocurrencies and to carry out in-depth research and consulting before
making any investment decisions.
All authors have reviewed and approved the
final version of the manuscript.

https://doi.org/10.37275/oaijss.v6i4.165

1. Introduction significant gains. Constantly increasing demand from

In recent years, Bitcoin cryptocurrency has been in investors, institutional adoption by large companies,
the spotlight of the investment world as a promising and increasing public awareness about blockchain
alternative for the future (Bianchi et al., 2020). Bitcoin, technology have contributed to strengthening its value
which was developed in 2009 by an individual or group (Acharya et al., 2014).
under the pseudonym Satoshi Nakamoto, has The blockchain technology on which Bitcoin is
attracted the attention of many with its tremendous based also provides strong traction (Ghalanos, 2019).
value growth potential (Fukami et al., 2021). As the Blockchain is a decentralized technology that records
first digital currency to use blockchain technology, transactions securely and transparently. This unlocks
Bitcoin has several factors that make it stand out as the potential for using blockchain in a variety of
an attractive investment (Bohte et al., 2019). One of sectors, including finance, logistics, and elections,
the key factors affecting Bitcoin's potential is the which could drive further adoption and increase
growth in value that has been observed over the last Bitcoin's value as an investment (Kelly, 2014; Kim,
decade (Gaman et al., 1980). Despite experiencing 2021). Institutional adoption has also been an
high price fluctuations, Bitcoin has recorded important catalyst in driving Bitcoin's potential as a

1010

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License
future investment alternative. Many well-known 2. Methods
companies, such as Tesla and Square, have The literature search process was carried out on
announced large investments in Bitcoin (Klein et al., various databases (PubMed, Web of Sciences, and
2019). This move gives legitimacy and trusts to Bitcoin Google Scholar) regarding the analysis cryptocurrency
as a widely recognized asset. This kind of growth in of bitcoin as an investment asset in the future. The
institutional adoption can also provide market search was performed using the terms: (1) "
stability and attract further interest from investors cryptocurrency bitcoin " OR " bitcoin " OR" bitcoin for
(Andersen et al., 1988; Amadeo et al., 2020). investments" OR" cryptocurrency bitcoin as an
Despite its promising potential, it is important to investment in future " AND (2) " cryptocurrency " OR "
remember that investing in Bitcoin also involves risks investment assets." The literature is limited to original
(Kliber et al., 2019). The price of Bitcoin is very volatile, studies and published in English. The literature
and its value can change dramatically in a short period selection criteria are articles published in the form of
of time (Andersson-Säll et al., 2019). In addition, original articles, a study about analysis of
regulations regarding cryptocurrencies are still cryptocurrency of bitcoin as investment assets in the
unclear in many countries, and regulatory changes future, studies were conducted in a timeframe from
could affect the price and adoption of Bitcoin. Security 2012-2023, and the main outcome was an analysis of
is also an important factor because Bitcoin can be cryptocurrency of bitcoin as investment assets in the
vulnerable to cyber-attacks and theft (Antonakakis et future. Meanwhile, the exclusion criteria were original
al., 2013). This study aimed to conduct studies related articles that were not related to the analysis
to the potential of bitcoin cryptocurrency as an asset cryptocurrency of bitcoin as an investment asset in the
for future investment as well as the potential risks that future, the effect of bitcoin in another aspect, and
exist in this asset. duplication of publications. This study follows the
preferred reporting items for systematic reviews and
meta-analysis (PRISMA) recommendations.

Identification of studies via databases and registers

Records removed before screening:

Identification

Records identified from:

Duplicate records removed (n =0)
Databases (n = 54)
Records marked as ineligible by
automation tools (n = 0)
Records removed for other reasons (n = 0)

Records screened Records excluded

(n = 24) (n = 30)
Screening

Reports sought for retrieval Reports not retrieved

(n = 20) (n = 4)

Reports assessed for eligibility Reports excluded:

(n = 3) Full text article exclude (n = 8)
Published not in English (n = 6)
Inappropriate methods (n = 3)
Included

Studies included in review

(n = 3)

Figure 1. Research PRISMA diagram.

1011

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License
3. Results and Discussion recorded. Once a block is completed, it is added to the
Value growth potential previous blockchain, forming an immutable
The growth potential of Bitcoin's value has been chronological order. Therefore, the blockchain
one of the factors that attract many investors (Alotaibi, becomes a secure and trusted database (Clegg, 2014;
2021). Since its launch in 2009, Bitcoin has seen a Connors et al., 2017). The uniqueness of the
tremendous rise in value. Bitcoin has a maximum blockchain is its decentralized and distributed nature.
supply limit of 21 million coins. This means that no The information in the blockchain is stored across a
more Bitcoins will be created after reaching that peer-to-peer network of computers called "nodes."
amount. This concept of limited supply creates a high Each node owns a complete copy of the blockchain and
perception of value and increases the demand for participates in the transaction verification process.
Bitcoin over time (Bauwens et al., 2006; Borradaile, In the context of Bitcoin, the blockchain acts as a
2021). Bitcoin has attracted the interest and attention ledger that records every Bitcoin transaction that
of various groups, including individual investors, occurs (Corbert et al., 2019; Cunado et al., 2020).
financial institutions, and technology companies Every time someone makes a Bitcoin transaction, the
(Bouri et al., 2017). This ever-increasing demand from information is confirmed by a network of nodes that
market participants can drive up the value of Bitcoin work together to verify it (Datta et al., 2010; Davidson
due to a limited supply that must meet growing et al., 2015). The verified transactions are then added
demand (Bouri et al., 2020). Some investors view to a new block and integrated into the blockchain. The
Bitcoin as a "safe haven" asset or haven from economic reliability and security of the Bitcoin blockchain is
and geopolitical instability (Knafo, 2006; Kufeoglu et based on strong cryptographic principles. Every
al., 2019). In situations of high uncertainty or transaction in the Bitcoin blockchain is encrypted
inflation, some people turn to Bitcoin as a potential using a complex cryptographic key, which maintains
hedging tool (Boyapati, 2018). This perception can the confidentiality and integrity of data. The
increase the demand for and value of Bitcoin application of blockchain technology in Bitcoin has
(Breedlove, 2019). Bitcoin awareness and acceptance brought significant benefits, such as transparency,
are expanding worldwide. More people understand security, and reliability. Blockchain also has broad
blockchain technology and Bitcoin's potential as a potential in many industries and is used for a wider
digital currency. More and more companies and range of purposes besides cryptocurrencies, such as
businesses are starting to accept Bitcoin as a payment logistics, banking, elections, supply chain
method, which has contributed to the growth in the management, and many more. Overall, the blockchain
value of Bitcoin (Brownlees et al., 2011; Catania et al., technology used by Bitcoin is one of the most
2019). revolutionary innovations in the world of finance and
technology. This provided a solid foundation for
Bitcoin is built on innovative blockchain
Bitcoin and contributed to the growing trust and
technology
acceptance of this digital currency (De Grauwe, 1988).
Blockchain is a decentralized system that records
and verifies transactions in an open and transparent Institutional adoption
manner (Cermak, 2017). This technology is the basis In recent years many large financial institutions
on which Bitcoin exists and operates. Blockchain uses and leading technology companies have begun to
a series of interconnected blocks to store transaction recognize the potential of Bitcoin. In early 2021, Tesla,
information (Chen et al., 2019). Each block contains a the leading electric car manufacturer led by Elon
number of transactions that have been verified and Musk, announced that it had invested around $1.5

1012

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License
billion in Bitcoin. Apart from that, Tesla also to the highly volatile price of Bitcoin. In addition, as a
announced that they will start accepting Bitcoin as relatively new digital asset, the Bitcoin market is still
payment for their cars. Jack Dorsey-led digital relatively small compared to traditional markets such
payments company Square also recognizes Bitcoin's as stocks and fiat currencies. However, despite this,
potential. Square allows their Cash App users to buy Bitcoin's market cap has increased substantially over
and sell Bitcoins, as well as store them within their the past few years. Since its initial launch in 2009,
app. Square has also invested company funds in Bitcoin's market cap has grown rapidly. In 2021,
Bitcoin (Dyhrberg, 2016a; Dutta et al., 2020). Bitcoin's market cap peaked at hundreds of billions of
One of the world's largest digital payment US dollars. In addition, increasing institutional
platforms, PayPal, has expanded its support for adoption has also had a positive impact on the Bitcoin
Bitcoin. In 2020, PayPal announced that they would market scarcity. Major financial institutions and
allow users to buy, sell and store Bitcoins within their leading companies that are starting to recognize the
platform. This provides easier and wider access for potential of Bitcoin have increased liquidity and
users to engage in Bitcoin transactions. Leading confidence in the Bitcoin market.
business software company MicroStrategy announced Even though the scarcity of the Bitcoin market
in 2020 that they had invested the majority of their continues to grow, it is important to remember that
company's cash into Bitcoin. Their CEO, Michael significant price fluctuations are still a hallmark of the
Saylor, has been an outspoken supporter of Bitcoin cryptocurrency market (Engle, 2002). The price of
and considers it a superior store of value assets. Bitcoin can experience large changes in a relatively
In addition to the above examples, there are also short period of time, so investors must understand
traditional financial institutions, such as JPMorgan and be prepared for this volatility. Apart from that,
Chase and Fidelity which have started to see and Bitcoin market capitalization can also be affected by
explore the potential of Bitcoin. This shows a shift in other factors such as government regulations, public
the views of financial institutions towards Bitcoin from adoption, and overall market sentiment. Changes in
initially skeptical to more accepting and interested in these factors can affect the liquidity and market value
this technology. This recognition from major financial of Bitcoin. In conclusion, Bitcoin market scarcity has
institutions and leading technology companies increased along with increasing institutional adoption
provides a significant boost to the widespread adoption and increasing public awareness. Even though the
of Bitcoin (Elliott, 2015). This can give investors and Bitcoin market is still relatively small compared to
the general public confidence in the potential of traditional markets, significant growth and
Bitcoin as a valid investment asset and increase the development have taken place over the last few years.
liquidity and stability of the Bitcoin market (Dyhrberg, However, it is important to remember that price
2016b). volatility and external factors still affect the Bitcoin
market (Frino, 2011).
Market scarcity
The Bitcoin market has a significant market cap. Some risks of Bitcoin cryptocurrency investment
Bitcoin market cap refers to the total value of all The price of Bitcoin is very volatile and can change
Bitcoins circulating in the market at any given time. significantly in a short period of time. This means
Market capitalization is calculated by multiplying the investors must be prepared for large fluctuations in
current Bitcoin price by the total number of Bitcoins value and consider potential losses (Fukami et al.,
in existence (Engel et al., 2005). It should be noted that 2021). Regulations regarding cryptocurrencies are still
the Bitcoin market cap can fluctuate significantly due unclear in many jurisdictions. Changes in government

1013

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License
regulations can affect the price and adoption of Bauwens L, Laurent S, Rombouts JVK. 2006.
Bitcoin. Investors should pay attention to related Multivariate GARCH models: A survey. Journal of
regulatory developments before making investment Applied Econometrics. 21: 79–109.
decisions. Due to its digital nature, Bitcoin is Bianchi D, Rossini L, Iacopini M. 2020. Stablecoins
vulnerable to cyberattacks and theft. Investors should and cryptocurrency returns: Evidence from large
take appropriate security measures, such as storing bayesian vars. SSRN.
Bitcoins in secure wallets and activating available Bohte R, Rossini L. 2019. Comparing the forecasting
security features (Frohlich et al., 2021). of cryptocurrencies by bayesian time-varying
volatility models. Journal of Risk and Financial
4. Conclusion
Management. 12: 150.
Bitcoin's potential as a future investment
Borradaile G. 2021. Defend dissent. Corvallis: Oregon
alternative is highly dependent on factors such as
State University.
value growth, institutional adoption, and
Bouri E, Molnár P, Azzi G, Roubaud D, Hagfors LI.
developments in blockchain technology. Nonetheless,
2017. On the hedge and safe haven properties of
it is important to be aware of the risks associated with
Bitcoin: Is it really more than a diversifier? Finance
investing in cryptocurrencies and to carry out in-depth
Research Letters. 20: 192–98.
research and consulting before making any
Bouri E, Shahzad SJH, Roubaud D, Kristoufek L,
investment decisions.
Lucey B. 2020. Bitcoin, gold, and commodities as
5. References safe havens for stocks: New insight through wavelet
Acharya S, Dunn J. 2014. Overstock. com ventures analysis. The Quarterly Review of Economics and
into digital currencies. Journal of Business Cases Finance. 77: 156–64.
and Applications. 12: 1. Boyapati V. 2018. The bullish case for bitcoin.
Amadeo K, Boyle MJ. 2020. US national debt by year Breedlove R. 2019. An open letter to ray dalio: Bitcoin.
compared to GDP and major events. The Brownlees CT, Engle RF, Kelly BT. 2011. A practical
Balance. 1: 1. guide to volatility forecasting through calm and
Andersen TG, Bollerslev T. 1988. Answering the storm. SSRN.
skeptics: Yes, standard volatility models do provide Catania L, Grassi S, Ravazzolo F. 2019. Forecasting
accurate forecasts. International Economic Review. cryptocurrencies under model and parameter
39: 885–905. instability. International Journal of Forecasting.
Andersson-Säll T, Lindskog JS. 2019. A study on the 35: 485–501.
DCC Garch Model’s Forecasting Ability with value Cermak V. 2017. Can bitcoin become a viable
at risk applications on the Scandinavian foreign alternative to fiat currencies? An empirical analysis
exchange market. of bitcoin’s volatility based on a GARCH model.
Antonakakis N, Darby J. 2013. Forecasting volatility In An Empirical Analysis of Bitcoin’s Volatility
in developing countries’ nominal exchange Based on a GARCH Model. New York: Skidmore
returns. Applied Financial Economics. 23: 1675– College.
91. Chen W, Wu J, Zheng Z, Chen C, Zhou Y. 2019.
Alotaibi SJ. 2021. Using blockchain for smart Market manipulation of bitcoin: Evidence from
contracts. in innovative and agile contracting for mining the Mt. Gox transaction network. 964–72.
digital transformation and industry IGI Global. 4: Clegg AG. 2014. Could bitcoin be a financial solution
208–221. for developing economies. Birmingham: University

1014

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License
 of Birmingham. 1: 2013–14. Engle R. 2002. Dynamic conditional correlation: A
Connors L, Mitchell W. 2017. Framing modern simple class of multivariate generalized
monetary theory. Journal of Post Keynesian autoregressive conditional heteroskedasticity
Economics. 40: 239–59. models. Journal of Business & Economic
Corbet S, Lucey B, Urquhart A, Yarovaya L. 2019. Statistics. 20: 339–50.
Cryptocurrencies as a financial asset: A systematic Frino A, Lecce S, Segara R. 2011. The impact of trading
analysis. International Review of Financial halts on liquidity and price volatility: Evidence from
Analysis. 62: 182–99. the Australian Stock Exchange. Pacific-Basin
Cuñado JH, Díez JC, Román JEA. 2020. Engie: Finance Journal. 19: 298–307.
Business model transformation. Harvard Deusto Fröhlich M, Wagenhaus MP, Albrecht Schmidt, Alt F.
Business Research. 9: 152–67. 2021. Don’t stop me now! Exploring challenges of
Datta A, Buchegger S, Vu L-H, Strufe T, Rzadca K. first-time cryptocurrency users. Designing
2010. Decentralized online social networks. Interactive Systems Conference 2021. 138–48.
In Handbook of Social Network Technologies and Fukami A, Stoykova R, Geradts Z. 2021. A new model
Applications. Boston: Springer. 349–78. for forensic data extraction from encrypted mobile
Davidson L, Block WE. 2015. Bitcoin, the Regression devices. Forensic Science International: Digital
Theorem, and the emergence of a new medium of Investigation. 38: 301169.
exchange. Quarterly Journal of Austrian Garman MB, Klass MJ. 1980. On the estimation of
Economics. 18: 311. security price volatilities from historical
De Grauwe P. 1988. Exchange rate variability and the data. Journal of Business. 53: 67–78.
slowdown in growth of international trade. Staff Ghalanos A. 2019. The RMGARCH models:
Papers. 35: 63–84. Background and Properties. Version 1.3–0.
Dutta A, Das D, Jana RK, Vo XV. 2020. COVID-19 and Kelly B. 2014. The bitcoin big bang: How alternative
oil market crash: Revisiting the safe haven property currencies are about to change the world.
of gold and Bitcoin. Resources Policy. 69: 101816. Hoboken: John Wiley & Sons.
Dyhrberg AH. 2016a. Bitcoin, gold and the dollar–A Kim J. 2021. Most traded national currencies for
GARCH volatility analysis. Finance Research bitcoin. Coinhills.
Letters. 16: 85–92. Klein T, Thu HP, Walther T. 2018. Bitcoin is not the
Dyhrberg AH. 2016b. Hedging capabilities of bitcoin. New Gold–A comparison of volatility, correlation,
Is it the virtual gold? Finance Research Letters. 16: and portfolio performance. International Review of
139–44. Financial Analysis. 59: 105–16.
Elliott CP. 2015. The Crisis of AD 33: Past and Kliber A, Marszałek P, Musiałkowska I, Katarzyna
present. Journal of Ancient History. 3: 267–81. Świerczyńska K. 2019. Bitcoin: Safe haven, hedge
Engel C, West KD. 2005. Exchange rates and or diversifier? Perception of bitcoin in the context of
fundamentals. Journal of Political Economy. 113: a country’s economic situation—A stochastic
485–517. volatility approach. Physica A: Statistical
Engle RF. 1982. Autoregressive conditional Mechanics and Its Applications. 524: 246–57.
heteroscedasticity with estimates of the variance of Knafo S. 2006. The gold standard and the origins of
United Kingdom inflation. Econometrica: Journal the modern international monetary system. Review
of the Econometric Society. 987–1007. of International Political Economy. 13: 78–102.

1015

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License
Küfeoglu S, Özkuran M. 2019. Energy consumption of
bitcoin mining. Faculty of Economics, University of
Cambridge

1016

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License