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Financial regulations and price inconsistencies across bitcoin markets

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  • Gina Pieters
  • Sofia Vivanco

Abstract

We document systematic differences in bitcoin prices across 11 different markets representing 26% of global bitcoin trade volume. These differences must ? due to the identical nature of all bitcoin ? result from characteristics of markets themselves. We examine differences across the markets and find that those which do not require customer identification for establishing an account are more likely to deviate from representative market prices than those which do. This implies that standard financial regulations, specifically know-your-customer regulations, can have a non-negligible impact on the bitcoin market.

Suggested Citation

  • Gina Pieters & Sofia Vivanco, 2016. "Financial regulations and price inconsistencies across bitcoin markets," Globalization Institute Working Papers 293, Federal Reserve Bank of Dallas.
  • Handle: RePEc:fip:feddgw:293
    DOI: 10.24149/gwp293
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    More about this item

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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