What Do Bitcoin Premiums Measure? Evidence from Global P2P Markets (opens in new tab)

This paper studies what Bitcoin (BTC) premiums in peer-to-peer (P2P) markets measure. Using transaction-level data from LocalBitcoins, we construct BTC premiums for 80 currencies relative to the U.S. dollar and relate them to blockchain transaction conditions, centralized crypto market (CEX) conditions, cross-border payment frictions, and foreign exchange (FX) markets. We show that these premiums reflect both trading frictions within crypto ...