Dark web traffic, privacy coins, and cryptocurrency trading activity

Scharnowski, Stefan

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DOI:	https://doi.org/10.1016/j.frl.2024.105875
URL:	https://www.sciencedirect.com/science/article/pii/...
Additional URL:	https://www.researchgate.net/publication/383633257...
URN:	urn:nbn:de:bsz:180-madoc-681892
Document Type:	Article
Year of publication:	2024
The title of a journal, publication series:	Finance Research Letters
Volume:	67, Part B
Issue number:	Article 105875
Page range:	1-7
Place of publication:	Amsterdam [u.a.]
Publishing house:	Elsevier
ISSN:	1544-6123
Publication language:	English
Institution:	Business School > ABWL u. Finanzierung (Theissen 2009-)
Pre-existing license:	Creative Commons Attribution 4.0 International (CC BY 4.0)
Subject:	330 Economics
Classification:	JEL: G10, G12, G15,
Keywords (English):	cryptocurrency , dark web , trading activity , privacy coin
Abstract:	Cryptocurrencies, especially privacy coins, conceal the flow of money. Similarly, the dark web obscures the flow of internet traffic, increasing anonymity. In this paper, I provide evidence that secondary market trading activity in privacy coins is linked to dark web traffic, although their pricing remains mostly unaffected. This finding holds after considering various controls and comparing similar privacy and non-privacy coins. However, when disentangling dark web traffic by country of origin, I find that privacy coin prices correlate positively with traffic from China, while trading volume is mainly driven by users from Russia and Iran.