Background: Since Bitcoin’s launch in 2009, cryptocurrencies have evolved from a fringe technology to instruments that global financial institutions list, trade, custody, and more recently package into exchange-traded products. Yet the central question remains unsettled: are cryptocurrencies an emerging asset class with distinct risk–return properties and institutional uses, or a recurring bubble propelled by speculation and market frictions? Methods: This meta-review synthesizes evidence from peer-reviewed finance and economics studies, regulatory standards, and high-quality policy reports (2013–2025). We follow best practices for meta-reviews and systematic reviews to scope, appraise, and thematically synthesize findings on (i) return and diversification characteristics, (ii) market efficiency and manipulation, (iii) valuation and adoption dynamics, (iv) institutionalization in investment banking (IB), and (v) regulatory and societal implications. Results: The literature documents (a) persistently high volatility and episodic bubbles, alongside (b) low average correlations with traditional assets and, at times, measurable diversification benefits. Evidence on safe-haven behavior is mixed and time-varying. Regulatory milestones (e.g., 2024 U.S. approval of spot Bitcoin ETPs; phased EU MiCA application in 2024–2025) and the growth of tokenized funds signal increasing institutional integration. However, manipulation risks, energy externalities, and prudential constraints temper the asset-class narrative. Conclusions: Cryptocurrencies exhibit characteristics of a nascent, high-beta alternative asset class whose investability hinges on robust market microstructure, regulation, and risk controls. They are not purely bubbles but bubble dynamics recur frequently. For investment banks, the prudent stance is adjacent adoption (custody, structured access, tokenization, and market-making within regulatory guardrails) rather than balance-sheet risk-taking. Keywords: Cryptocurrency; Investment Banking; Asset Class; Bubble; Regulation
Dhruvi Kedia (Mon,) studied this question.