MBA students have been exploring the investment case for bitcoin and ethers, digital currencies that backers hope will disrupt the financial services industry.Bitcoin exchange Kraken, in partnership with The Economist, recently hosted a case competition that revolved around determining the investment attractiveness of the two controversial and sometimes volatile cryptocurrencies.
While bitcoin's price has more than doubled in 2016, to about $975 this week, cyber-heists from large exchanges have made the currency's price swing wildly.
Kraken asked MBA programs from around the globe to prepare a video answering the question: “If you had $1m to invest across two blockchain technologies, bitcoin and ethereum, by buying bitcoins and ethers — the digital assets or ‘cryptocurrencies’ that power these decentralised computer networks — and you could not touch your investment for the next five years, how much of that $1m do you invest in each?”
Tulane University's Freeman School of Business beat 13 other business school teams to take first place, claiming the top prize of $10,000. Ryerson University's Ted Rogers School of Business came second and Brigham Young University's Marriott School of Business came third.
"We're very happy to have had the opportunity to witness some of the great brainpower that's out there coming through these MBA programs," said Jesse Powell, CEO of Kraken.
The Freeman School of Business team created a minimum-variance portfolio of 67% bitcoin and 33% ethers, based on historical-return data of the two cryptocurrencies. They validated their strategy using a multiple regression model, back-testing and a Monte Carlo simulation.
“This was an investment competition, so we knew we had to approach bitcoin and ether not as currencies but as a new class of assets, one that appreciates over time,” said team member Jon-Paul Navarro.
Bitcoin has become an established part of the business school curriculum since it first boomed in 2013.
Duke University's Fuqua School of Business and NYU's Stern School of Business, pioneered the classes in 2014.
Since then, attention has focused on a core part of bitcoin's technology — the blockchain, a distributed ledger that simplifies transaction processing — which has moved into mainstream finance.
“Developing high quality educational content on these topics can be extremely useful for MBA students. They allow our students to think through novel applications of a general purpose technology,” said Professor Christian Catalini at MIT Sloan. Since the spring of 2015, students at Sloan have been able to take an intensive three-day course on blockchain developed by Christian.
The blockchain courses are part of a broader bet on fintech by business schools, as large financial institutions and students demand graduates who understand and can work with novel financial technologies. Peer-to-peer lending, cross-border money transfers, financial analytics, and artificial intelligence are hot topics in the business school world.
“Technology continues to transform the business landscape at a breath-taking pace,” said Raghu Sundaram, Vice Dean of MBA Programs at NYU Stern. “Business education needs to innovate to keep pace with the rapid rate of change.”
Student Reviews
Tulane University: A.B. Freeman School of Business
Different extracurricular activities
Tulane is the ideal spot for me. I love the instructors I’ve got, the extracurricular activities offered, and each student's uniqueness. Being able to attend school in New Orleans makes the entire experience unique and provides me with numerous additional learning opportunities.
Business Management
I studied business management at Tulane University and the experience was superb. I encountered very friendly students who could help out easily when one was stuck. The university staff was also good and helpful. I participated in sporting activities, that is soccer. Other sports were also available and students were free to choose any of their choice. There are also societies and clubs that students join at will and grow in them. I loved the mentorship program that I found in this university. In our department, the lecturers were very competent. I wa able to graduate within the timeline of my degree program
Tulane University School of Social Work
Tulane University is a well renowned University in New Orleans, LA. I remember when I was growing up, that people in the Northeast called Tulane the Harvard of the south. I have always been quite taken with Tulane as an institution. However, upon attending graduate school there, I suppose I have taken more of a neutral perspective. I enjoyed the female professors, who would be mindful of their words and actions, and always encouraging us to break out of our comfort zones. However, I would not recommend any of the male professors, as most had a superiority complex over the overwhelming number of women and non-gender-conforming individuals.
Great international community!
University is well located in one of the most interesting cities in the United States. New Orleans is full of cultural and ethnic diversity!
The exchange international community is also super nice and I met a lot of incredible people.
The only negative I would give is that some classes are a bit simple and don't challenge students academically quite enough.
Inspiring environment
As a student at Tulane University, I've found myself immersed in a dynamic and inspiring environment. The faculty are not just teachers, but mentors and guides who genuinely care about our success. The campus is alive with diverse perspectives and experiences that have broadened my horizons. New Orleans is more than just a city; it's a living, breathing entity, with a rich history and culture that's infused into every aspect of life here. It's truly been an enriching experience.
Outstanding institution
Tulane University is an outstanding institution that offers an outstanding academic experience complemented by a rich campus life and vibrant surrounding community. Faculty members are committed to student success, providing personalized attention and guidance, and the campus is aesthetically pleasing, located in the culturally unique city of New Orleans. The student body is diverse and inclusive, and there are numerous opportunities for personal and professional growth.
World of opportunities
As a student at Tulane University, I have found myself immersed in a world of opportunities. From the rich history of the campus, to the dynamic student life, to the exceptional faculty, every day is an adventure. And also the city of New Orleans - it's hard to resist the charm and excitement of this cultural gem. Since arriving at Tulane, I've made good friends that will support me as I go on.
Diverse and vibrant student body
Tulane University has exceeded my expectations in every way! From the moment I stepped onto the campus, I knew I was in a special place. The architecture is beautiful, the city of New Orleans adds so much charm, and the people are genuinely friendly. The professors are passionate about their subjects and genuinely care about their students. The student body is diverse and vibrant, with countless clubs and organizations to get involved in. Tulane university is highly recommendable!
