Market Leadership in Cryptocurrency Exchanges: A Price Synchronization Study

Abstract

This research explores how cryptocurrency prices move across different trading platforms and identifies which exchanges lead in setting these prices. We collected price data every 10 seconds for 22 different cryptocurrencies from nine major exchanges, including eight global platforms and CoinMENA, the only regulated exchange operating in the Middle East. Our data spans four distinct periods in 2023 and 2024. By comparing price movements between exchanges, we found that prices stay remarkably close to each other across different platforms, especially for well-known cryptocurrencies like Bitcoin and Ethereum. Our findings show that Crypto.com and Kraken had the most closely matched prices during our final study period, suggesting they play an important role in price setting. We also discovered that larger exchanges don't always lead the market - smaller exchanges like CoinMENA keep their prices just as closely aligned with major exchanges for the cryptocurrencies they offer. More established cryptocurrencies tend to have more consistent prices across exchanges compared to less traded ones. Over time, we noticed that prices became more synchronized across all exchanges, showing that the cryptocurrency market is becoming more efficient. These findings help traders, investors, and regulators better understand how cryptocurrency prices are set and how they spread between different trading platforms. Our research provides new insights into how the cryptocurrency market works and how information flows between exchanges affect prices.

Date of Award	2024
Original language	American English
Awarding Institution	HBKU College of Science and Engineering