IFin Seminar, Anthony Lee Zhang, Chicago Booth "Competition in the Cryptocurrency Exchange Market"
Istituto di finanza
Data: 20 marzo 2025
Speaker: IFin Seminar, Anthony Lee Zhang, Chicago Booth
Title: "Competition in the Cryptocurrency Exchange Market"
Date: March 20, 2025
Ore: 12:25 - 13:40
Room: Red Room - Executive Center
Lugano West Campus
Abstract
Cryptocurrency exchange market structure is very fragmented, since cryptocurrencies are fungible, but customers cannot freely move across cryptocurrency exchanges. We build a model where exchanges with captive customers are linked imperfectly by arbitrageurs, showing that "star-shaped'' equilibria can exist, in which arbitrageurs endogenously coordinate on one exchange as a liquidity hub. The model predicts that large exchanges' listing decisions should influence price dispersion, trade volumes, arbitrage flows, and listing decisions on small exchanges. We provide evidence for the model's predictions using data on exchange prices and volume, as well as blockchain token flows across exchanges.