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Dark web traffic, privacy coins, and cryptocurrency trading activity

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  • Scharnowski, Stefan

Abstract

Cryptocurrencies, especially privacy coins, conceal the flow of money. Similarly, the dark web obscures the flow of internet traffic, increasing anonymity. In this paper, I provide evidence that secondary market trading activity in privacy coins is linked to dark web traffic, although their pricing remains mostly unaffected. This finding holds after considering various controls and comparing similar privacy and non-privacy coins. However, when disentangling dark web traffic by country of origin, I find that privacy coin prices correlate positively with traffic from China, while trading volume is mainly driven by users from Russia and Iran.

Suggested Citation

  • Scharnowski, Stefan, 2024. "Dark web traffic, privacy coins, and cryptocurrency trading activity," Finance Research Letters, Elsevier, vol. 67(PB).
    • Handle: RePEc:eee:finlet:v:67:y:2024:i:pb:s154461232400905x
    DOI: 10.1016/j.frl.2024.105875
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    References listed on IDEAS

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    1. Sapkota, Niranjan & Grobys, Klaus, 2021. "Asset market equilibria in cryptocurrency markets: Evidence from a study of privacy and non-privacy coins," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 74(C).
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    7. Alnasaa, Marwa & Gueorguiev, Nikolay & Honda, Jiro & Imamoglu, Eslem & Mauro, Paolo & Primus, Keyra & Rozhkov, Dmitriy, 2022. "Crypto-assets, corruption, and capital controls: Cross-country correlations," Economics Letters, Elsevier, vol. 215(C).
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    More about this item

    Keywords

    Cryptocurrency; Dark web; Trading activity; Privacy coin;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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