At Bryant, research means more than getting a good grade or filling a spot on a resume, it’s about advancing knowledge in ways that matter. Powerful student/professor partnerships explore big ideas, discover new ways of looking at the world, and pioneer innovative opportunities for us all to move forward.
One such investigation “Cryptocurrencies: applications and investment opportunities,” a ground-breaking article co-authored by Professor of Finance A. Can Inci and Rachel Lagasse ’19 was recently published in the Journal of Capital Markets Studies (JCMS). Their study, one of the first to examine the emerging role that cryptocurrencies could play as both individual investment opportunities and as components of optimal portfolios, offers new insight into an often confusing area.
“It’s kind of incredible to be able to contribute new knowledge to a very new topic in the finance world,” says Lagasse, who is now a Revenue, Accounting, and Controls Associate at MathWorks. “And it was really amazing to finally see all of our hard work pay off.”
Into the Unknown
The paper originated with Lagasse’s Honors Thesis, an original, in-depth research project conducted by senior Honors students into a subject of their choosing. Lagasse, who studied Finance, Spanish, and Actuarial Mathematics at Bryant, decided to focus on the fledgling and largely obscure world of cryptocurrencies and to demystify them, and their potential uses, for a broader audience.
“I saw an opportunity to explore something that a lot of people were talking out but very few people seemed to really understood. I made it a goal of mine to help people gain a better sense of how cryptocurrencies work, and how you can use them in your own investments.”
While cryptocurrency, an internet-based medium of exchange which uses cryptographic functions to conduct financial transactions, has become an increasingly popular topic of conversation and speculation in recent years, little real, and accessible, research had been done regarding how they could be incorporated into actual investment portfolios. Lagasse was eager to address that gap.
“I saw an opportunity to explore something that a lot of people were talking out but very few people seemed to really understood,” says Lagasse. “I made it a goal of mine to help people, and hopefully, gain a better sense of how cryptocurrencies work, and how you can use them in your own investments.”
“I like to venture into the unknown because you never know what you're going to find. I was delighted Rachel came up with the topic because this is a recently emerging field with lots of room for research and discovery.”
In need of an advisor for the project, Lagasse turned to Professor Inci, who had taught the Introduction to Finance course that inspired her to pursue the discipline. “When I presented my idea to him, he lit up. He told me how he really wanted to look into cryptocurrencies too, and that he was excited to learn more,” says Lagasse.
“I like to venture into the unknown because you never know what you're going to find,” says Inci, who also teaches an Innovations in Finance course that introduces his students to cutting-edge ideas and concepts in the financial arena. “I was delighted Rachel came up with the topic because this is a recently emerging field with lots of room for research and discovery.”
As they began to look further into the subject matter, their excitement grew. “We reviewed the literature and noticed that there really were not too many outlets or publications that existed in this area,” says Inci. “Much of the research has been done about the characteristics of cryptocurrencies, but as to what their place could be in our financial portfolios, it wasn't there.”
Taking it further
For more than a year, Lagasse used a variety of methodologies to investigate the role that cryptocurrencies have played and could play in enhancing portfolio performance, establishing that they can play an important and useful role in both optimal portfolio construction and in investments. Lagasse also evaluated the utility of various types of cryptocurrencies for different investment purposes. She found that Ripple was the best single investment option, and that Bitcoin was the best cryptocurrency for enhancing the characteristics of the optimal portfolio.
“Whenever I had an idea, he would help me take it a step further and suggest other things that I could look into as well. I’m not sure I could have done it without his expertise, guidance, and encouragement throughout the whole process.”
“This was my first big research project like this. I gained so many skills from the thesis, like how to manage projects, how to interpret data and analyses, and how to find and use new resources and techniques,” says Lagasse.
Throughout the process, Inci was an invaluable mentor. “Whenever I had an idea, he would help me take it a step further and suggest other things that I could look into as well,” Lagasse says. “I’m not sure I could have done it without his expertise, guidance, and encouragement throughout the whole process,”
“It can be an ideal symbiotic relationship,” notes Inci. “Both parties contribute to the project from different perspectives.”
Upon completion of the thesis, Inci, impressed with Lagasse’s research, discussed turning the project into a journal article with her. She agreed to let him take the lead in further refining her work, preparing it for submission, and shepherding it through the often arduous application and approval process.
"In academia, our goal is to enhance the welfare of the society, to dig deep and to discover new avenues of knowledge for growth. Our essential function is to learn the unknown, and then share it with our students, the public, and society as a whole.”
“When applying to a journal, they look for a unique contribution to the field, something novel or in an area something that has not been investigated before,” says Inci. “They look for thorough examination of the issue and they ensure that the paper is sound – statistically, mathematically, and theoretically.”
When the journal examined the paper, they found little to critique. “Normally, the review process takes much longer,” Inci notes. “The back and forth between the authors and the referees for the publication takes a long time. In this particular instance, however, it was much smoother and much faster, because Rachel did a great job with her research, and I was able to take it and shape it according to what they were looking for.”
Everything is connected
Looking back, Lagasse notes that being able to focus on a subject she chose made the work more meaningful, and a more valuable learning opportunity. “The thesis allows you to pick something that you're really passionate about, and put your all into it,” she says. “It’s not just an assignment you have to complete – it’s something that you really care about. You’re interested in the results and contributing to the conversation.”
For Inci, the work offered the opportunity to advance his field. “In academia, our goal is to enhance the welfare of the society, to dig deep and to discover new avenues of knowledge for growth,” he says. “Our essential function is to learn the unknown, and then share it with our students, the public, and society as a whole.”
It was also a boon to his teaching. “Some people think that teaching and research are two separate things, but they actually go together,” he says. “The things that I research, I can then teach them to my students and keep them up to date. And while you are teaching, it always sparks new research ideas. Everything is connected.”