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The impact of the Bitcoin bubble of 2017 on Bitcoin's P2P market

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  • Holub, Mark
  • Johnson, Jackie

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.

Suggested Citation

  • Holub, Mark & Johnson, Jackie, 2019. "The impact of the Bitcoin bubble of 2017 on Bitcoin's P2P market," Finance Research Letters, Elsevier, vol. 29(C), pages 357-362.
    • Handle: RePEc:eee:finlet:v:29:y:2019:i:c:p:357-362
    DOI: 10.1016/j.frl.2018.09.001
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Akyildirim, Erdinç & Corbet, Shaen & Cumming, Douglas & Lucey, Brian & Sensoy, Ahmet, 2020. "Riding the Wave of Crypto-Exuberance: The Potential Misusage of Corporate Blockchain Announcements," Technological Forecasting and Social Change, Elsevier, vol. 159(C).
    2. Kyriazis, Nikolaos & Papadamou, Stephanos & Corbet, Shaen, 2020. "A systematic review of the bubble dynamics of cryptocurrency prices," Research in International Business and Finance, Elsevier, vol. 54(C).
    3. Xun Zhang & Fengbin Lu & Rui Tao & Shouyang Wang, 2021. "The time-varying causal relationship between the Bitcoin market and internet attention," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 7(1), pages 1-19, December.
    4. Aurelio F. Bariviera & Ignasi Merediz‐Solà, 2021. "Where Do We Stand In Cryptocurrencies Economic Research? A Survey Based On Hybrid Analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 35(2), pages 377-407, April.
    5. Eray Gemici & Muslum Polat & Remzi Gök & Muhammad Asif Khan & Mohammed Arshad Khan & Yunus Kilic, 2023. "Do Bubbles in the Bitcoin Market Impact Stock Markets? Evidence From 10 Major Stock Markets," SAGE Open, , vol. 13(2), pages 21582440231, June.

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    More about this item

    Keywords

    Bitcoin; Cryptocurrencies; Bid-ask spread; Peer-to-peer (P2P) exchange; Bubble;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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