 Network analysis on Bitcoin arbitrage opportunitiesRasa Bruzgė and Alfreda Šapkauskienė () The North American Journal of Economics and Finance, 2022, vol. 59, issue C Abstract: Many studies have shown that investment in Bitcoin could serve to diversify the stock market. The existing literature offers insight into how arbitrage trading may diminish the risks associated with cryptocurrencies. Using arbitrage data and a novel methodology, this paper uncovers pertinent insights for investors interested in hedging against losses. Evidence points to the dsx, kraken, and bitstamp exchanges as the most attractive for buying Bitcoin and the cexio, bitmarketlt, and coindeal exchanges as the most attractive for selling Bitcoin. We employ network analysis to explore the interrelationships in thirteen cryptocurrency exchanges, providing evidence that kraken and bitstamp are leaders in market-forming trends, while coindeal and dsx serve as intermediary exchanges. Overall, these findings show that investors can mitigate their trading risks by knowing precisely where to buy and sell Bitcoin and which exchanges offer arbitrage opportunities. Using these results, investors can develop long-term and algorithmic trading strategies. Keywords: Arbitrage; Network analysis; Bitcoin; Cryptocurrency exchanges (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:59:y:2022:i:c:s1062940821001704 DOI: 10.1016/j.najef.2021.101562 Access Statistics for this article The North American Journal of Economics and Finance is currently edited by Hamid Beladi More articles in The North American Journal of Economics and Finance from Elsevier |
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