Abstract
The article is devoted to the analysis of the application of cryptocurrency instruments in the diversification of investment portfolios. The study considers specific security risks, high market volatility, and behavioral instability of the digital financial environment. The cryptocurrency market is gradually integrating into the global financial architecture. It demonstrates sensitivity to central bank monetary policy, information flows, geopolitical crises, and technical failures of digital platforms. The purpose of the study is to develop an adaptive model for controlling the risks and volatility of digital assets within a diversified portfolio. The empirical basis was formed using market data for 2023–2025. The analysis covers the dynamics of Bitcoin, Ethereum, stablecoins, decentralized finance instruments, environmentally oriented crypto assets, traditional stock indices, gold-based instruments, and green bonds. The research methodology is based on correlation analysis, volatility spillover modeling, economic and mathematical calculations, Conditional Value at Risk, downside risk assessment, as well as the use of safe haven and portfolio stability indices. The results indicate that digital assets optimize the risk-return ratio only under conditions of limited exposure and regular rebalancing. Empirical data confirm the higher resilience of Bitcoin and stablecoins during banking and inflationary shocks. In contrast, decentralized finance tokens, NFT instruments, and meme coins generate substantial losses and high instability. Based on the obtained results, standard portfolio models were developed for conservative, balanced, institutional, and ESG-oriented investors. The highest stability indicators were recorded in hybrid structures and algorithmic balancing models. These models include automated rebalancing and a moderate share of Bitcoin, stablecoins, environmentally oriented crypto assets, and gold-based instruments. The practical significance of the study lies in the development of methodological recommendations for constructing resilient investment strategies under conditions of increased market instability.
References
1. Aggarwal, V., Sharma, S., Bhatia, P., Bhardwaj, I., Na, R., & Sharma, S. (2025). Portfolio diversification with non-conventional assets: A comparative analysis of Bitcoin, FinTech, and green bonds across global markets. Journal of Risk and Financial Management, 18(12), Article 687. https://doi.org/10.3390/jrfm18120687
2. Biagi, A. J. (2026). The impact of cryptocurrency market volatility on the stability and portfolios of traditional financial institutions. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.6059114
3. Boido, C., & Aliano, M. (2025). The contribution of cryptocurrencies to portfolio diversification. Investment Management and Financial Innovations, 22(2), 26–35. https://doi.org/10.21511/imfi.22(2).2025.03
4. Dashko, I., Cherep, O., & Mykhailichenko, L. (2025). Kryptohoryzont: tsyfrovyi kliuch do investytsiinoho maibutnoho [Cryptohorizon: a digital key to the investment future]. Visnyk Khmelnytskoho natsionalnoho universytetu. Seriia: Ekonomichni nauky - Herald of Khmelnytskyi National University. Series: Economic Sciences, 4(344), 209–215. http://dx.doi.org/10.31891/2307-5740-2025-344-4-28 (in Ukrainian)
5. Dotsenko, O., Hlushchenko, O., Pronoza, P., Shvaiko, M., & Davydov, O. (2024). Formuvannia dynamichnykh patterniv povedinky tsin DeFi-aktyviv u skladi rynku kryptovaliut [Formation of dynamic behavior patterns of DeFi asset prices within the cryptocurrency market]. Finansovo-kredytna diialnist: probleme teorii ta praktyky - Financial and Credit Activity: Problems of Theory and Practice, 3(56), 173–184. http://dx.doi.org/10.55643/fcaptp.3.56.2024.4327 (in Ukrainian)
6. European Systemic Risk Board. (2025). Crypto-assets and decentralised finance: Report on stablecoins, crypto-investment products and multifunction groups. https://www.esrb.europa.eu/pub/pdf/reports/esrb.report202510_cryptoassets.en.pdf
7. Guizani, S., Ajina, A., & Kahloul, I. (2025). The impact of Bitcoin on the performance of diversified financial asset portfolios. EuroMed Journal of Business, ahead-of-print(ahead-of-print). https://doi.org/10.1108/EMJB-02-2025-0065
8. Gulyás, R., Gál, V. A., & Sipiczki, Z. (2025). Unlocking blockchain-driven financial opportunities: Optimizing portfolios with cryptocurrencies and European stock markets. Frontiers in Blockchain, (8), Article 1665541. https://doi.org/10.3389/fbloc.2025.1665541
9. Harigovind, K. R., Suganthiya, M. S., & Sharma, B. (2025). Cryptocurrency as diversification tool in investment portfolios. International Journal of Research Publication and Reviews, 6(5), 7626–7629. https://www.ijrpr.com/uploads/V6ISSUE5/IJRPR45665.pdf
10. Israyelyan, A. (2026). Bitcoin as an investment instrument: Opportunities and challenges. Alternative, (1), 29–36. https://doi.org/10.55528/18292828-2026.1-29
11. Kovalenko, V. M., & Kostrytsia, B. I. (2026). Rozvytok investytsiinoi kryptobirzhi u konteksti transformatsii finansovoho rynku Ukrainy [Development of an investment crypto exchange in the context of transformation of the financial market of Ukraine]. Pidpryiemnytstvo ta innovatsii – Entrepreneurship and Innovation, (39), 103–109. http://dx.doi.org/10.32782/2415-3583/39.15 (in Ukrainian)
12. Kuang, W. (2025). Greening crypto portfolios: The diversification and safe haven potential of clean cryptocurrencies. Humanities and Social Sciences Communications, (12), Article 850. https://doi.org/10.1057/s41599-025-04910-z
13. Makedon, V., & Koptilyi, D. (2025). Digital transformation and artificial intelligence as factors in the economic recovery of enterprises following armed conflicts. Economics, Entrepreneurship, Management, 12(1), 33–48. https://doi.org/10.56318/eem2025.01.033
14. Makedon, V., Trachova, D., Myronchuk, V., Opalchuk, R., & Davydenko, O. (2024). The development and characteristics of sustainable finance. In A. Hamdan (Ed.), Achieving sustainable business through AI, technology education and computer science (Studies in Big Data, Vol. 163, pp. 373–382). Springer. https://doi.org/10.1007/978-3-031-73632-2_31
15. Makedon, V. V., & Ilchenko, N. O. (2021). Koniunktura svitovoho rynku IT-posluh v umovakh ekonomiky 4.0 [The conjuncture of the global IT services market in the conditions of Economy 4.0]. Efektyvna ekonomika - Efficient Economy, (1). https://doi.org/10.32702/2307-2105-2021.1.8 (in Ukrainian)
16. PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft. (2026). PwC Global Crypto Regulation Report 2026. https://www.pwc.de/de/unterlagen/pwc-global-crypto-regulation-report-2026.pdf
17. Raksakadarma, B. A. (2025). Safe-haven and diversification roles of gold and Bitcoin: Evidence from financial markets (Final Project, Institut Teknologi Bandung). https://digilib.itb.ac.id/assets/files/2025/QmF5dSBBdnJpYW50byBSYWtzYWthZGFybWFfMjkxMjMzNjAucGRm.pdf
18. Serazhym, Yu. V., Verbitska, I. I., & Boldovska, K. P. (2025). Analiz volatylnosti tsin na kryptovaliuty ta yii vplyv na hlobalni finansovi rynky [Analysis of cryptocurrency price volatility and its impact on global financial markets]. Aktualni pytannia ekonomichnykh nauk – Current Issues of Economic Sciences, (7). http://dx.doi.org/10.5281/zenodo.14650486 (in Ukrainian)
19. Sharma, M. (2025). Does Bitcoin add to risk diversification of alternative investment fund portfolio? International Journal of Financial Studies, 13(4), Article 197. https://doi.org/10.3390/ijfs13040197
20. Velykoivanenko, H. I., Semashko, K. A., & Tkach, O. V. (2024). Bahatokryterialni optymizatsiini modeli formuvannia portfelia kryptovaliut [Multicriteria optimization models for cryptocurrency portfolio formation]. Problemy suchasnykh transformatsii. Seriia: ekonomika ta upravlinnia - Problems of Modern Transformations. Series: Economics and Management, (16). http://dx.doi.org/10.54929/2786-5738-2024-16-11-02 (in Ukrainian)
21. Vinogradova, V., & Gubareva, M. (2025). Are impact crypto assets a new emerging asset class for sustainable and impact investors? Finance Research Letters, (78), Article 109114. https://doi.org/10.1016/j.frl.2025.109114
22. Yilmaz, A., Sevim, N., & Ozkul, A. (2026). Cryptocurrency expansion, climate policy uncertainty, and global structural breaks: An empirical assessment of environmental and financial impacts. Sustainability, 18(2), Article 951. https://doi.org/10.3390/su18020951
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Copyright (c) 2026 Mykhailo Huz, Artur Oleksyn, Inna Kulko-Labyntseva