When open digital markets become costly to participate in

Digital finance is often described as lowering barriers to market participation, yet formal market access does not necessarily mean that participation remains workable under real trading conditions. This study examines this problem in cryptocurrency markets by developing the concept of a High Participation Cost State (HPCS), a participant-facing condition in which markets remain technically open while effective trading becomes costly or fragile. Using hourly Binance data for Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) from 2020 to 2025, we construct Market Stress States through asset-specific Markov-switching GARCH models and operationalize HPCS using standardized Amihud illiquidity and 24-hour realized volatility. A multi-model design combining statistical models, machine learning, and robustness analyses examines whether HPCS is distinct from conventional market stress and which microstructure conditions predict its emergence. The findings show that HPCS is related to, but not reducible to, market stress. High participation cost conditions are associated with liquidity deterioration, volatility intensity, price impact, trading volume, and trade-size environments, and appear more frequently when market activity is characterized by smaller average trade size. The study contributes to digital finance and platform-mediated markets by showing that open digital markets may remain formally accessible while becoming harder to participate in effectively.