Doctoral Study Reveals Cryptocurrencies are a Distinct Asset Class


The boom in the cryptocurrency sector over the past few years led qualified equity dealer, Dr Steven Msomi to embark on a doctoral study that examined how cryptocurrencies could be classified and priced to determine their ability to affect other areas of the economy, and whether they can cushion investments. He was awarded a Doctor of Philosophy in Finance for his efforts by UKZN during the Autumn 2022 Graduation season. 

The study was supervised by finance experts Professor Mabutho Sibanda and Dr Edson Vengesai of the School of Accounting, Economics and Finance.

In layperson’s terms cryptocurrency is a digital currency designed to serve as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it.

The study employed secondary data that entails different aspects of cryptocurrencies investing. It found that cryptocurrencies are a separate and distinct asset class and that they could play meaningful hedging and diversification roles for South African and global investors.

With vast experience in corporate and investment banking, Msomi has always been interested in how investors can achieve better returns without exposing their investments to undue risks factors. His study suggests that cryptocurrencies could fulfil this role.

Msomi is the co-founder and Chief Executive Officer of Kabusha Advisory that offers mergers and acquisitions, transaction advisory and capital raising services. He said: ‘We assist our clients with due diligence, valuation, business plans and financial models regarding their expansionary, acquisition and loan restructure needs. In a results-driven business environment like ours, I ensure that my team delivers the quality reports that are expected by our clients.’

On his doctoral achievement, he said: ‘I am immensely excited about this achievement, especially about the role that one could play within the digital economy in South Africa and possibly the rest of Africa.’ He plans to share his research findings by running corporate roadshows and putting together a training programme on blockchain and cryptocurrencies.

In the past, Msomi lectured Corporate Finance and Investment Finance to Master of Business Administration students at UKZN’s Graduate School of Business and Leadership and he has supervised more than 25 master’s dissertations. 

He is eternally grateful to his wife – a medical doctor specialising in Radiology, his parents, their domestic helper and the rest of the family as they assisted him and his wife whenever they were in need.

While taking a well-deserved break from studies he plans to go back to his favourite pastime of reading about history and he is training to once again participate in the Ironman Endurance Race in Port Elizabeth in 2023.  

Words: Hazel Langa

Photograph: Abhi Indarajan