UC students' cryptocurrency advice leads to big gains

Investment fund has more than doubled thanks to class recommendations

Using recommendations from University of Cincinnati students, a cryptocurrency fund has grown from $50,000 to more than $120,000 in less than 15 months.

As part of an economics course, Economic Applications of Blockchain, UC students are challenged to research potential cryptocurrency investments for a fund owned by UC’s Kautz-Uible Economics Institute.

When the class started during the 2017-18 academic year, students created investment strategies for a hypothetical fund. The hypothetical investments became real during the 2022-23 academic year when a donation provided actual funds to invest.

Some of the students begin the class as experienced cryptocurrency traders while others have minimal knowledge about the subject. But at the end of the semester, their collective input is used to invest real money that in the future will support students through scholarships, study abroad trips and professional development.

“From a surface level, it sounds like an awful idea,” Robert Schron, a junior from Cleveland, Ohio, said of investing in cryptocurrency. “But the more information you learn about it, the better of an idea it becomes.”

Two men speak together in a lab space.

Michael Jones, PhD, director of the Cryptoeconomics Lab, speaks to guests during the grand opening of UC Digital Futures. Andrew Higley/UC Marketing + Brand

Experience-based learning

The course is taught by Michael Jones, PhD, Carl H. Lindner College of Business assistant professor of economics and director of the Cryptoeconomics Lab at UC Digital Futures.

Financial literacy is important to improving financial decision making and increasing financial empowerment, Jones said, with understanding cryptocurrencies providing its own challenges separate from the financial sector as a whole. The decentralized nature of cryptocurrencies, with fewer laws and regulations compared to the traditional financial sector and a misunderstanding of who controls digital assets in cryptocurrency, contribute to the challenges.

During the class, Jones teaches students about cryptocurrencies, the technologies that support them, the legal environment, future trends and additional applications of the blockchain, an unchanging  digital ledger of economic transactions that records not only financial transactions but anything of value.

“College students, a lot of them don’t have great financial literacy,” Jones said. “They don’t always make great financial decisions. This is a tool to really help them better understand how to manage their own finances.”

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Wanting students to gain some real-world experience, Dan Kautz, co-founder and co-owner of real estate development and management organization K&S Companies, and Woody Uible, a principal at Bartlett Wealth Management and a UC Foundation trustee, donated $50,000 for a fund that would invest in cryptocurrencies.

Students from the fall 2022 class offered the first suggestions on how the money should be invested, with the initial investment occurring in early 2023. Last fall, a new class made their own recommendations, and some of the funds were reallocated based on their input.

“That was probably my favorite part of the class, working with real-world examples and it having real-world consequences,” said Darik Page, a fourth-year student from Cincinnati.

A sizable portion of the institute’s funds are invested in bitcoin, which is considered a relatively stable cryptocurrency with the largest market capitalization. The fund has investments in lesser-known cryptocurrencies, too.

When the initial investment was made, bitcoin was valued under $20,000. Its value rose to more than $73,000 in March 2024.

“It’s kind of crazy,” said Erica Boling, a third-year student from Westerville, Ohio. “But I also think because crypto is taking off that it was sort of inevitable because the whole industry is growing.”

Grand Opening Ceremony of the Digital Futures building at the University of Cincinnati.

Guests visit the Cryptoeconomics Lab during the grand opening of UC Digital Futures. Andrew Higley/UC Marketing + Brand

Opportunities for everyone

Lily Elfar headshot

Lily Elfar

Whether they entered the course as experienced cryptocurrency traders or had only basic knowledge about the subject, students from the class said they enjoyed the experience and learned a lot.

Lily Elfar, a senior from Cincinnati, had heard about Bitcoin and the conviction of Sam Bankman-Fried, the founder of cryptocurrency exchange FTX who was convicted of orchestrating a multibillion-dollar fraud. Beyond that, she didn't know much about the subject before she enrolled in the class. “When I walked in, I was very scared thinking I was going to fail or I was going to fall behind because I didn’t know what was going on,” said Elfar, who is majoring in business economics with a minor in marketing. “But I couldn’t have been more grateful for such a great professor who made it so easy.”

Fellow students Boling and Page also began the class with limited knowledge while Schron had previously invested in cryptocurrency.

Even as someone who began the class with more experience than many of his classmates, Schron said there was a lot he learned such as how cryptocurrencies are developed and how they're priced.

Robert Schron headshot

Robert Schron

Professor Jones also encouraged Schron to study lesser-known cryptocurrencies while conducting research for the investment project.

“He kept telling me to think outside of the box and keep looking for other cryptos that are not as popular,” said Schron, who is majoring in both economics and finance with a minor in cryptoeconomics. “I did that and found a couple that I’ve added to my own portfolio, which has definitely benefited me.”

As part of their lessons, the class visited the Cryptoeconomics Lab at UC Digital Futures where they were able to see a mining rig, a computer that solves complex formulas to find cryptocurrencies.

Additionally, professionals in finance and cryptocurrency spoke to students during the semester, sharing positive projections and potential concerns with the students.

Experts also are involved in vetting the students’ investment recommendations. A three-person panel reviews investment plans before purchases are made, and Jones works with the university's Investment Office for additional guidance.

“The project was really interesting how the professionals took our input and applied it to the fund,” said Boling, who is majoring in economics and real estate. “It was cool to see.”

Taking their own advice

Darik Page headshot

Darik Page

The initial $50,000 and all earnings in UC's cryptocurrency investment will remain in the fund for at least three years, until 2026.

After three years, Jones plans to treat the fund like an endowment. Approximately 5% of the fund will be used to support students through scholarships, study abroad programs and professional development. The rest will remain invested and hopefully continue to grow, allowing additional withdrawals in future years to continue supporting students.

“It’s a very good learning lesson of life in general of setting yourself up for future success and that rewards aren’t always instantaneous, but the long-term rewards are sometimes great,” said Page, who is majoring in business economics.

Students from the class also have used the information they learned in their personal finances.

Schron, who had invested since he was in high school, made some changes to his portfolio that have paid off for him.

Page opened his own portfolio in October, during the middle of the semester.

“That project definitely helped me expand my own wallet and my own portfolio,” he said. “I did take some of my own recommendations or my team’s recommendations, and it has definitely worked out positively for me.”

Erica Boling headshot

Erica Boling

Boling hasn't invested yet, but she wants to.

“I think in the future I’ll definitely invest,” she said, “and I’ll have a little bit of a diversified portfolio because I now know about some of the different options.”

Elfar, while appreciative of everything she learned, doesn't plan to invest in cryptocurrency.

“Personally, it’s just not something I would go out of my way to purchase or an interest of mine,” she said. “But I was very interested in the class, learning how people invest, learning how they make money, and it was a very informative class.”

Even as a professor, Jones said, he's learned a lot during the class, including from his students. Their input is often very insightful, he said, while other times sounding a bit crazy.

Still, some of the crazy sounding ideas ultimately are pretty savvy. Students in the class before the investment fund existed suggested investing all their hypothetical money into Dogecoin, which was created as a joke but has grown in acceptance.

“Frankly their advice might not have been bad,” Jones said. “Back in 2020, if we had the fund and had I taken the students’ recommendation then to throw all $50,000 into Dogecoin, it would be worth more than $4 million. So sometimes those students’ crazy ideas are not so crazy.”

Featured image at top: Cryptocurrency coins. Photo/Kanchanara via Unsplash

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