Graduation Year


Date of Submission


Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Richard Burdekin

Rights Information

© 2022 Spencer W McCann


This thesis analyzes the differences between the underlying blockchain structures of Bitcoin and Ethereum, also referred to as tokenomics, and how they drive the performance of each cryptocurrency as a financial asset. Marks (2010) discusses how “if assets produce cash flow, that gives them (intrinsic) value.” Buffet (2011) discusses how intrinsic value is essential for an asset to act as a portfolio hedge or diversifier, especially in times of high inflation. Despite gold being a common inflation hedge within a portfolio, and Bitcoin being called “gold 2.0” or a “digital store of value,” this thesis finds Ethereum to be a preferred inflation hedge. Using weekly data from 2017-2022, the empirical results of a time series regression show Ethereum, especially after 2020, having significant estimated coefficients with inflation hedging fundamentals such as the DXY (US Dollar Index) and inflation expectations, whereas Bitcoin shows no significance to either. Inflation has been rising since 2020 after the Fed began expanding in response to the COVID-19 crisis, and it has been Ethereum, not Bitcoin, that has prevailed as a preferred inflation hedge. The results also show how Ethereum may be able to act as a diversifier to the NASDAQ. The most significant results for both cryptocurrencies are their respective transaction volume and google search volume, indicating that cryptocurrencies are still speculative assets and are only as valuable as their demand.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.