Abstract
The Bitcoin market becomes the focus of the economic market since its birth, and it has attracted wide attention from both academia and industry. Due to the absence of regulations in the Bitcoin market, it may be easier to bring some kinds of illegal behaviors. Thus, it raises an interesting question: Is there abnormity or illegal behavior in Bitcoin platforms? To answer this question, we investigate the abnormity in five leading Bitcoin platforms. By analyzing the financial index, i.e. the normalized logarithmic price return, we find that the properties of price return in bitFlyer are completely different from others. To find the possible reasons, we find that the abnormal ask price and bid price appear simultaneously in bitFlyer, which may be potentially linked to either price manipulation or money laundering. It verifies our conjecture that there may be abnormity or price manipulation in Bitcoin platforms. Furthermore, our findings in price return could also provide an innovative and effective method to detect the abnormity in Bitcoin platforms.
Highlights
In the last decade, we have witnessed significant changes in finance, impacting both the academic community and financial profession [1,2,3,4,5,6,7,8,9,10,11]
At 17 : 00 on October 10, 2018, the price of a Bitcoin reaches 6,558.46 dollars; the 24-hour trading volume of Bitcoin is more than three billion dollars, which is 37 times greater than the daily trading volume of General Electric Company; and the total market capitalization of Bitcoin is more than one hundred billion dollars, which is approximately equal to the market capitalization of General Electric Company
We investigate the properties of price return in five leading Bitcoin platforms, including OKCoin, BTC-e, Coinbase, bitFlyer, and Bitfinex
Summary
We have witnessed significant changes in finance, impacting both the academic community and financial profession [1,2,3,4,5,6,7,8,9,10,11]. We collect data from several Bitcoin platforms and investigate the properties of the Bitcoin market, especially the price return. With the development of Bitcoin market, a number of papers have been dedicated to studying the Bitcoin market They found that one or two special Bitcoin platforms exhibit similar behaviors with traditional financial markets. All of these previous studies are concentrated on the characteristics of the Bitcoin market Distinguished from these empirical studies of price return, our work focuses on the abnormity in different Bitcoin platforms which may be caused by illegal activities. We investigate the properties of price return in five leading Bitcoin platforms, including OKCoin, BTC-e, Coinbase, bitFlyer, and Bitfinex. The study in price return could provide an innovative and effective method to detect the abnormity in Bitcoin platforms
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