Tulane University's Freeman School of Business has won cryptocurrency exchange Kraken’s contest that revolved around determining the investment attractiveness of bitcoin and ethereum.

Kraken, in partnership with The Economist, asked MBA programs from around the world to prepare a video answering the question: “If you had $1m to invest across two blockchain technologies, Bitcoin and Ethereum, by buying bitcoins and ethers – the digital assets or "cryptocurrencies" that power these decentralised computer networks – and you could not touch your investment for the next 5 years, how much of that $1m do you invest in each?”

This challenge was posed to 13 teams at business schools around the world. Kraken's experts selected the top three proposals, and visitors to the case study competition website voted for the People's Choice winner.

According to the official announcement, first place was awarded to the team from Tulane University's Freeman School of Business who created a minimum-variance portfolio of 67% Bitcoin and 33% Ether-based on historical-return data of the two cryptocurrencies. They validated their strategy using a multiple regression model, back-testing and a Monte Carlo simulation.

The team from Ryerson University's Ted Rogers School of Business came in second, who proposed a 69:31 investment ratio for Bitcoin and Ethereum respectively. According to the team, Bitcoin offered a higher expected value, but the volatility and speculative nature of cryptocurrencies indicated a need for diversification across platforms.

Third place was awarded to Brigham Young University's Marriott School of Business who based their Bitcoin-heavy portfolio on the cryptocurrency's established presence in the market, stable functionality and finite supply.

The People's Choice Award went to the team from Ryerson University's Ted Rogers School of Business after they received the most votes from the general public.

"We at Kraken would like to thank all 13 teams that participated in the challenge to optimise a $1 million, five-year Bitcoin-Ether portfolio," said Jesse Powell, CEO of Kraken, a global digital-asset exchange. "We enjoyed reviewing the variety of approaches taken across proposals. We'd like to stress that we did not assess proposals based on whether they represented Bitcoin-dominant or Ether-dominant portfolios. We are an agnostic exchange, which means that we do not prefer a certain digital asset over another. We evaluated proposals, including both the paper and the video from each team, based on other key qualities (e.g., apparent depth of understanding of the subject matter, accuracy in their representations, ability to clearly convey their findings and conclusions in an engaging way)."

The teams who competed hailed from FIA Business School; Tulane University; Ryerson University, Ted Rogers School of Management; Porto Business School; Ivey Business School at Western University; Rutgers Business School; Middlebury Institute of International Studies; BYU Marriott School of Management; Johns Hopkins Carey Business School; Worcester Polytechnic Institute; Tuck School of Business at Dartmouth; Creighton University, Heider College of Business; and University of North Texas.