HSE researchers find Counter-Strike skins outperform bitcoin and gold as alternative investments

Virtual knives, custom-painted machine guns, and gloves are common collectible items in videogames. A new study by scientists from HSE University suggests that digital skins from the popular video game Counter-Strike: Global Offensive (CS:GO) rank among the most profitable types of alternative investments, with average annual returns exceeding 40%. The study has been published in the Quarterly Journal of Finance.

Investors have long sought after assets that are insulated from stock market fluctuations, especially during times of instability. This has fuelled a boom in alternative investments, with people putting their money into art, fine wine, and vintage cars. Videogame skins can now be confidently added to this list, offering not only aesthetic appeal but also impressive financial returns.

Skins are virtual items that alter the appearance of in-game objects, such as weapons or characters. While they don’t usually impact gameplay or a player’s chances of winning, they allow users to express their individuality. Skins range from simple designs to rare collectibles that can be bought, traded, or sold on specialised online platforms. The most sought-after and rare skins have become the foundation of a new investment trend.

The study by Victoria Dobrynskaya, Associate Professor at the Faculty of Economic Sciences of HSE University, and Vladimir Strelnikov, her former student, now a master's student at New Economic School, suggests that digital collectibles from the videogame Counter-Strike: Global Offensive (CS:GO) can yield average annual returns of over 40%.

To assess the investment appeal of CS:GO skins, the researchers analysed data on nearly 5,000 unique in-game items traded on the Steam platform between 2013 and 2024.

The study found that skins are among the top-performing assets in terms of the risk–return ratio. The average annual return on a portfolio of skins was 41.2%, which is several times higher than that of the US stock market (CRSP), real estate (REITs), bonds or gold. While their profitability is comparable to Bitcoin, skins exhibit significantly lower volatility.

According to the analysis, the average skin price was $155, but the distribution was highly skewed, with most items priced significantly lower. The median price was just $11.50, while the most expensive skin in the Steam sample sold for nearly $4,000.

'On average, a skin is traded 800 times per month, with Steam charging a 15% fee on each transaction. As a result, frequent trading is generally unprofitable, making long-term investment in these assets optimal,' explain Dobrynskaya and Strelnikov.

'The Sharpe ratio for skins is 0.34, indicating a favourable return-to-risk profile. For comparison, during the same period, the Sharpe ratios were 0.25 for the CRSP, 0.12 for gold, and 0.21 for Bitcoin. A higher Sharpe ratio signifies better investment performance. While there are no guarantees, we have observed data spanning over a decade, during which most skins have steadily increased in value,' notes Dobrynskaya.

The skin market proved to be largely insensitive to market risks, with the most profitable assets being inexpensive items: common skins of around $2.25 in price generate average monthly returns of nearly 19%. In contrast, rare and expensive skins priced at around $1,700 yield monthly returns below 3%, which is still higher than the average returns of the stock market. As a result, strategies that prioritise marketable, liquid items rather than rare collectibles demonstrate the best performance.

'In-game collectibles are more than just pixels—they are genuine financial instruments that help diversify portfolios and hedge against volatility. At the same time, the market is liquid and transparent, with a capitalisation exceeding $4 billion. This market remains relatively unknown to outside investors, and most skin investments come from actual players. Long-term investment in skins is a common practice among them,' Dobrynskaya and Strelnikov comment.