Does bitcoin liquidity resemble the liquidity of other financial assets?

Does bitcoin liquidity resemble the liquidity of other financial assets?

Bitcoin is becoming a popular financial asset and means of transacting. However, little is known about an important aspect of the bitcoin market: its liquidity. We consider whether various dimensions of liquidity evident in other asset classes are present in bitcoin spot and futures liquidity. We fi...

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Veröffentlicht in:Australian journal of management 2022-11, Vol.47 (4), p.729-748
Hauptverfasser: Ma, Rui, Marshall, Ben R, Nguyen, Nhut H, Visaltanachoti, Nuttawat
Format: Artikel
Sprache:eng
Schlagworte:
Bitcoin
Cryptocurrencies
Digital currencies
Economic development
Liquidity (Economics)
Market share
Planning
Stock exchanges and current events
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container_title Australian journal of management
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creator Ma, Rui
Marshall, Ben R
Nguyen, Nhut H
Visaltanachoti, Nuttawat
description Bitcoin is becoming a popular financial asset and means of transacting. However, little is known about an important aspect of the bitcoin market: its liquidity. We consider whether various dimensions of liquidity evident in other asset classes are present in bitcoin spot and futures liquidity. We find variations in spot liquidity across bitcoin exchanges and a strong commonality in bitcoin spot and futures market liquidity. The pricing of spot and futures bitcoin is relatively inefficient, and liquidity plays an important role. Deterioration in liquidity also contributes to bitcoin crash risk and large return declines.
doi_str_mv 10.1177/03128962211069615
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subjects Bitcoin
Cryptocurrencies
Digital currencies
Economic development
Liquidity (Economics)
Market share
Planning
Stock exchanges and current events
title Does bitcoin liquidity resemble the liquidity of other financial assets?
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