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Publication type: Working paper – expertise – study
Title: Crypto currencies : an analysis of market liquidity
Authors: Zöbeli, Marco
Kley, Christoph
Stumpp, Bettina Eva
et. al: No
DOI: 10.21256/zhaw-20873
Extent: 39
Issue Date: Sep-2020
Publisher / Ed. Institution: ZHAW Zürcher Hochschule für Angewandte Wissenschaften
Publisher / Ed. Institution: Winterthur
Language: English
Subjects: Bitcoin; Market liquidity; Ether; Ripple; LiteCoin; Crypto currency; Crypto coin
Subject (DDC): 332: Financial economics
Abstract: In recent years, crypto currencies have gained in importance and, due to their popularity, many new crypto currencies have emerged. An essential function of every crypto currency is its ability to be exchanged for fiat currencies such as the US dollar. The quality of this exchange market crucially depends on the liquidity of the crypto currency markets. This study examines how the market liquidity of the most important crypto coins has developed against the US dollar, compared to each other and over time. The crypto currencies reviewed were Bitcoin, XRP (Ripple), Ether, Bitcoin Cash, and LiteCoin. Developments in the period December 2015 to August 2018 were analyzed based on data collected by CoinMarketCap, and the market liquidity of the crypto currencies was measured using common key indicators. In the period under review, the market liquidity of all crypto currencies was shown to have improved, which suggests that larger volumes can be traded without having a major impact on prices. The correlation of the returns between the individual currencies was found to increase. Finally, the examination of the volatility of the crypto currencies reviewed revealed that the volatility of crypto currencies in general is still very high compared to traditional asset classes such as equities, bonds or precious metals.
License (according to publishing contract): Licence according to publishing contract
Departement: School of Management and Law
Organisational Unit: Institute of Wealth & Asset Management (IWA)
Appears in collections:Banking, Finance, Insurance

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