Liquidity of bitcoin - insights from Polish and global markets

Katarzyna Włosik


Bitcoin can be exchanged for other cryptocurrencies as well as for fiat currencies on many different platforms. Nevertheless, its real convertibility may be limited by market liquidity. The main aim of this article is to characterise and compare big and small bitcoin markets in terms of liquidity. We examine four platforms with high trade volume: Kraken, Bitstamp, BitFlyer and BTCBOX, as well as small entities which enable bitcoin to be traded in Polish zloty: BitBay and BitMarket. We compare the number of trades and the time between trades on selected bitcoin markets, determine the volume distribution throughout the day and analyse the dynamics of Amihud’s illiquidity measure – ILLIQ. We find that an exchange which is among the global leaders in terms of trading bitcoin in a particular traditional currency can be considered a smaller market in terms of trade volume in another traditional currency. Moreover, the results imply that BitBay and BitMarket can be perceived as local markets. They are mainly used for trading in Polish zloty, and are illiquid in terms of trading in the remaining traditional currencies. Home bias, the fact that they offer a possibility of trading in a less popular currency (in comparison to the world reserve currencies), and that have their interface in Polish, may give these platforms a competitive advantage.
Author Katarzyna Włosik (WE / KTPiPP)
Katarzyna Włosik,,
- Department of Money Theory and Monetary Policy
Journal seriesRuch Prawniczy, Ekonomiczny i Socjologiczny, [Journal of law, Economics and Sociology], ISSN 0035-9629, e-ISSN 2543-9170, (N/A 40 pkt)
Issue year2019
Publication size in sheets0.8
Keywords in Polishbitcoin, płynność, polski rynek bitcoina
Keywords in Englishbitcoin, liquidity, Polish bitcoin market
Languageen angielski
Score (nominal)40
Score sourcejournalList
ScoreMinisterial score = 40.0, 15-04-2020, ArticleFromJournal
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