A0346
Title: Contagion vs competition: Evidence from crypto exchange flows
Authors: Kirill Shakhnov - University Of Surrey (United Kingdom) [presenting]
Daniele Bianchi - Queen Mary University of London (United Kingdom)
Abstract: The purpose is to investigate how shocks affecting cryptocurrency exchanges propagate through the network of Bitcoin flows. It distinguishes between two channels of propagation: Contagion and competition. Using a novel dataset of on-chain Bitcoin flows between exchanges, it is analyzed how exchange-specific shocks affect network flows, liquidity, and price discovery. It is found that negative shocks to exchanges lead to significant changes in inter-exchange flows and affect market quality measures, including price differences and bid-ask spreads. Evidence suggests that the cryptocurrency market structure exhibits both competitive dynamics and contagion effects, with the relative importance depending on the nature of the shock and the specific exchange affected.
