*Article* **Which Cryptocurrencies Are Mostly Traded in Distressed Times?**

### **Nikolaos A. Kyriazis \* and Paraskevi Prassa**

Department of Economics, University of Thessaly, 28th October 78 Street, 38333 Volos, Greece **\*** Correspondence: knikolaos@uth.gr

Received: 10 July 2019; Accepted: 14 August 2019; Published: 20 August 2019

**Abstract:** This paper investigates the level of liquidity of digital currencies during the very intense bearish phase in their markets. The data employed span the period from April 2018 until January 2019, which is the second phase of bearish times with almost constant decreases. The Amihud's illiquidity ratio is employed in order to measure the liquidity of these digital assets. Findings indicate that the most popular cryptocurrencies exhibit higher levels of liquidity during stressed periods. Thereby, it is revealed that investors' preferences for trading during highly risky times are favorable for well-known virtual currencies in the detriment of less-known ones. This enhances findings of relevant literature about strong and persistent positive or negative herding behavior of investors based on Bitcoin, Ethereum and highly-capitalized cryptocurrencies in general. Notably though, a tendency towards investing in the TrueUSD stablecoin has also emerged.

**Keywords:** Bitcoin; cryptocurrency; liquidity

**JEL Classification:** E44; G11; G12; G15
