kaal:claim:4033886-005

Dual listing narrows bid ask spreads in traditional markets by injecting liquidity, but crypto markets behave differently: price differences between two exchanges can reach upwards of five percent during peak trading times.

Source quote, verbatim

For traditional markets, when a security is dual- listed, we see the bid-ask spread decrease because additional liquidity is being injected into the market. This differs from the crypto market where the difference between the two exchanges can reach upwards of 5% during peak trading times.5

From

Wulf A. Kaal, Samuel Evans, Hayley Howe, Digital Asset Valuation (2022), I. Introduction, p. 4
https://ssrn.com/abstract=4033886 · source PDF

Cite as

Wulf A. Kaal, Samuel Evans, Hayley Howe, Digital Asset Valuation (2022). SSRN: https://ssrn.com/abstract=4033886

Holds when

peak trading times
assets listed on multiple crypto exchanges

Classification

empiricalsupport: evidencedfailure: cross exchange price divergencefamily: liquidity-and-market-structure-failureeconomicsdefi

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