# kaal:claim:4033886-010

**Claim.** Arbitrage trading emerges in crypto markets because of information asymmetries across exchanges, which arise from imperfect disclosure, and the resulting decline in market efficiency is a key indicator of an inefficient market.

**Type.** mechanism  **Support.** argued

**Holds when.**

- multiple exchanges trading the same asset

**Source quote.**

> The reason arbitrage trading starts to happen is because of asymmetries of information across the different exchanges. These asymmetries can happen as a result of imperfect disclosures or incite on whether a company has a willingness to take on debt.

**From.** Wulf A. Kaal, Samuel Evans, Hayley Howe, *Digital Asset Valuation* (2022), II.1.a Market Arbitrage Issues, page 6

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

**Verify.** sha256 of source PDF `52ba05b1292b1be4bfaf1ee5cf56b14fea9c196d870603e794d7ee316df129bd` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20et%20al.%20-%202022%20-%20Digital%20Asset%20Valuation.pdf

**Failure mode.** cross exchange information asymmetry  (family: information-asymmetry)

**Topics.** disclosure, economics, defi

**Keywords.** arbitrage, information-asymmetry, market-efficiency, crypto-exchanges

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.