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Abstract Peer-to-peer (P2P) exchange has an important role to play in global Bitcoin trading, yet most research into Bitcoin price behaviour focuses on exchange trading. An analysis of Bitcoin's P2P… Click to show full abstract
Abstract Peer-to-peer (P2P) exchange has an important role to play in global Bitcoin trading, yet most research into Bitcoin price behaviour focuses on exchange trading. An analysis of Bitcoin's P2P market indicates that when prices are measured relative to the going market rate, P2P traders in Bitcoin face different premiums and discounts depending on the currency traded, which in turn impacts on the bid-ask spread. In periods of extreme price changes such as the extraordinary price rise in Bitcoin occurring in 2017, measuring bid-ask spreads in relative terms masks the true picture of widening monetary bid-ask spreads.
Journal Title: Finance Research Letters
Year Published: 2019
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