Valuation, Liquidity Price, and Stability of Cryptocurrencies

Proceedings of the National Academy of Sciences 115, 1131-1134 (2018)

7 Pages Posted: 6 Mar 2018

See all articles by Carey Caginalp

Carey Caginalp

University of Pittsburgh; Chapman University

Gunduz Caginalp

University of Pittsburgh - Department of Mathematics

Date Written: October 16, 2017

Abstract

Cryptocurrencies are examined through the asset flow equations and experimental asset markets. Since tangible value of a typical cryptocurrency is non-existent, the theory suggests that price will gravitate toward liquidity value, i.e., the total amount of cash available for purchase of the asset divided by the number of units. Thus it is unlikely that cryptocurrencies in their current form will be stable in the absence of a mechanism of a link to value.

Keywords: cryptocurrency, bitcoin, bubble, valuation, liquidity price, stability

Suggested Citation

Caginalp, Carey and Caginalp, Gunduz, Valuation, Liquidity Price, and Stability of Cryptocurrencies (October 16, 2017). Proceedings of the National Academy of Sciences 115, 1131-1134 (2018). Available at SSRN: https://ssrn.com/abstract=3130495

Carey Caginalp

University of Pittsburgh

Pittsburgh, PA 15260
United States

Chapman University ( email )

One University Dr.
Orange, CA 92866
United States

Gunduz Caginalp (Contact Author)

University of Pittsburgh - Department of Mathematics ( email )

507 Thackeray Hall
Pittsburgh, PA 15260
United States
412-624-8339 (Phone)
412-624-8397 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
93
Abstract Views
257
rank
284,370
PlumX Metrics