The Economics of Digital Token Cross-Listings
66 Pages Posted: 5 Dec 2018 Last revised: 11 May 2019
Date Written: May 5, 2019
This paper examines the role of cross-listings in the digital token marketplace ecosystem. Using a unique set of publicly available and hand-collected data from 3,625 tokens traded in 108 marketplaces, I find significant increases in price, trading volume, network growth and on-chain activity around the date of a token’s first cross-listing. Tokens earn a 49% raw cumulative return in the two weeks around the cross-listing date. Daily network growth triples on the day of cross-listing. Using the uniquely heterogeneous characteristics of token marketplaces, I am able to identify specific value-creation channels. I provide the first evidence supporting value creation through network externalities proposed by recent token-valuation models. Consistent with equity cross-listing theory, I find higher returns for cross-listings that reduce market segmentation and improve information production.
Keywords: Blockchain, Cryptocurrencies, Crypto-Tokens, Tokens, Exchange, Marketplace, Listing, Bitcoin, BTC, Fintech, ICO, Initial Coin Offering
JEL Classification: G12, G14, G18, G24, G28, G30
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