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Velocity, Holding Time and Lifespan of Cryptocurrency in Transactions

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  • Yu Zhang
  • Mostafa Chegeni
  • Claudio Tessone

Abstract

The measurement of the velocity of money is still a significant topic. In this paper, we proposed a method to calculate the velocity of money by combining the holding-time distribution and lifespan distribution. By derivation, the velocity of money equals the holding-time distribution's value at zero. When we have much holding-time data, this problem can be converted to a regression problem. After a numeric simulation, we find that the calculating accuracy is high even if we used only a small part of the holding time data, which implies a potential application in measuring the velocity of money in reality, such as digital money. We also tested the methods on Cardano and found that the method can also provide a reasonable estimation of velocity in some cases.

Suggested Citation

  • Yu Zhang & Mostafa Chegeni & Claudio Tessone, 2024. "Velocity, Holding Time and Lifespan of Cryptocurrency in Transactions," Papers 2406.16587, arXiv.org.
    • Handle: RePEc:arx:papers:2406.16587
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    References listed on IDEAS

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    1. Pedro Leao, 2005. "Why does the velocity of money move pro-cyclically?," International Review of Applied Economics, Taylor & Francis Journals, vol. 19(1), pages 119-135.
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    3. A.E.Akinlo, 2012. "Financial Development and the Velocity of Money in Nigeria: An Empirical Analysis," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 4(2), pages 097-113, December.
    4. Omid M. Ardakani, 2023. "The dynamics of money velocity," Applied Economics Letters, Taylor & Francis Journals, vol. 30(13), pages 1814-1822, July.
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