University business school teams competing in the Kraken Case Study competition predicted two to one that a bitcoin-weighted portfolio will outperform one that is Ethereum-weighted, according to The Economist. The competition invited students to choose which blockchain technology is the better long-term buy.
The students were asked if they have a million dollars to invest in the two blockchain technologies and they cannot touch their investment for the next five years, how much of that sum do they invest in each, and why?
The students’ submissions are hosted on “The Economist’s Which MBA?” website. ‘Which MBA?’ is a division of The Economist Newspaper Group that offers online products serving prospective MBA students and business schools.
“October 31, 2016, marked the 8-year anniversary of the bitcoin whitepaper. Today, governments, banks, Fortune 500 technology companies and investors alike have recognized blockchain technology’s huge, positive and disruptive potential,” said Jesse Powell, founder and CEO of Kraken, a digital exchange.
Powell wondered if bitcoin’s first-mover advantage and entrenchment insulates it from its competitors. At the same time, Ethereum could offer a unique value proposition over bitcoin. Another question is: do both assets coexist, or is it a winner-take-all game?
Still another question is how an investor should evaluate each opportunity in terms of maximizing advantages and portfolio diversification.
In the competition, the teams evaluated each technology’s strengths and weaknesses, project governance, use cases, adoption, investor and developer sentiment, regulatory issues and historical performance.
“The complexity of this evaluation coupled with the tremendous upside potential for a correct bet is why we felt this was the perfect question for this challenge,” Powell said.
The competition will award $21,000 in prize money to the winning teams. The first-place team will win a $10,000 grand prize. Second place will win $5,000, and third place will receive $3,000. Kraken will select the top three teams.
There will also be a “People’s Choice” award of $3,000 for the team whose proposal receives the most votes from the public. The winners will be announced in December 2016.
The following schools are represented:
• FIA Business School
• Tulane University
• Ryerson University, Ted Rogers School of Management
• Porto Business School
• Ivey Business School at Western University
• Rutgers Business School
• Middlebury Institute of International Studies
• BYU Marriott School of Management
• Johns Hopkins Carey Business School
• Worcester Polytechnic Institute
• Tuck School of Business at Dartmouth
• Creighton University, Heider College of Business
• University of North Texas
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