Anthony Lee Zhang is an associate professor of finance at the UChicago Booth School of Business. His research focuses on household finance, industrial organization, real estate, and web3/defi. Zhang has received a number of honors and awards, including the 2019 AQR Top Finance Graduate Award and the 2018 Facebook Fellowship. Zhang earned a BA in economics from the University of Chicago in 2013, where he received the Becker Friedman Institute Award for Academic Achievement in Microeconomics, and a PhD in Economic Analysis and Policy from the Stanford Graduate School of Business in 2019.
Personal Website | Paper | Slides
Abstract
Cryptocurrency exchange market structure is fragmented, since cryptocurrencies are fungible, but customers cannot move freely across cryptocurrency exchanges. We build a model where exchanges with captive customers are linked by arbitrageurs, showing that “star-shaped” equilibria can exist, in which arbitrageurs endogenously coordinate on one exchange as a liquidity hub. The model predicts that large exchanges’ listing decisions should influence price dispersion, arbitrage flows, trade volumes, and listing decisions on small exchanges. We provide evidence for the model’s predictions using data on exchange prices and trade volumes, as well as blockchain token flows across exchanges.
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