 Empirical analysis of liquidity thresholds for crypto assetsSheng-Feng Hsieh, Gerard Brennan and Alexander J. Sannella International Journal of Accounting Information Systems, 2024, vol. 54, issue C Abstract: This study applies the methodology of the SEC (2018) to empirically determine thresholds for liquidity of crypto assets, utilizing two metrics for assessing liquidity: the Average Daily Volume (ADV) calculated by the number of units of crypto assets traded (ADV#) and by the traded dollar amounts (ADV$). Our findings reveal that the liquidity distribution patterns for both actively and thinly traded National Market System (NMS) stocks, alongside crypto-USD pairs, exhibit comparable trends. Notably, the liquidity threshold distributions remain stable despite the inclusion of crypto assets with very low unit prices; however, the volume of units traded does affect the distribution when ADV$ is used. This research contributes to the accounting field by offering a new approach to determine liquidity benchmarks for crypto assets, potentially guiding the assessment of whether a crypto asset is traded in an active or inactive market for fair value accounting purposes. Keywords: Fair value measurement; Thinly traded; Crypto asset; Inactive market (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:ijoais:v:54:y:2024:i:c:s1467089524000320 DOI: 10.1016/j.accinf.2024.100699 Access Statistics for this article International Journal of Accounting Information Systems is currently edited by S.V. Grabski More articles in International Journal of Accounting Information Systems from Elsevier |
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