Portfolio Selection Methods

The cryptocurrency market has grown rapidly in its short life since the birth of Bitcoin as the first decentralized digital currency. At first, this market was only of interest to a small group of people, especially those interested in new technologies; But the attention of many traditional investors was drawn to this emerging market with the expansion of real-world applications of cryptocurrencies. With the expansion of cryptocurrency market, investors needed a portfolio of cryptocurrencies that will bring them to the highest return with the least risk. The current research has studied the methods of portfolio optimization and has reviewed the studies in the field of cryptocurrency market to cover this need. These researches show that naïve, mean-variance and maximum utility methods have the best performance compared to other methods. However, the studies conducted are few and do not include many portfolio optimization methods. Therefore, there is a need to do more research in the cryptocurrency market, and especially about new methods of portfolio optimization and comparing them with older methods.