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Financial Regulations and Price Inconsistencies across Bitcoin Markets

45 Pages Posted: 18 Mar 2015 Last revised: 10 Sep 2017

See all articles by Gina C. Pieters

Gina C. Pieters

University of Chicago - Department of Economics; Cambridge Centre for Alternative Finance

Sofia Vivanco

Trinity University

Multiple version iconThere are 3 versions of this paper

Date Written: December 13, 2016

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.

Keywords: Bitcoin, Cryptocurrency, Financial Regulation, Arbitrage

JEL Classification: G12, G14, K42, L86

Suggested Citation

Pieters, Gina C. and Vivanco, Sofia, Financial Regulations and Price Inconsistencies across Bitcoin Markets (December 13, 2016). Available at SSRN: https://ssrn.com/abstract=2576452 or http://dx.doi.org/10.2139/ssrn.2576452

Gina C. Pieters (Contact Author)

University of Chicago - Department of Economics ( email )

1101 East 58th Street
Chicago, IL 60637
United States

Cambridge Centre for Alternative Finance ( email )

10 Trumpington Street
Cambridge, CB21QA
United Kingdom

HOME PAGE: http://https://www.jbs.cam.ac.uk/faculty-research/centres/alternative-finance/

Sofia Vivanco

Trinity University ( email )

San Antonio, TX 78212
United States

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