Bitwise Asset Management, one of several U.S. firms seeking regulatory approval to launch a bitcoin exchange-traded fund (ETF), has estimated that 95 percent of bitcoin trading volumes are faked. Mar 26, · Now, in a twist, a company hoping to list an ETF has reported to US financial regulators that around 95% of all Bitcoin trading volume has been faked by exchanges. Bitwise, a crypto-asset Author: Mike Orcutt. Mar 22, · Key Points Ninety-five percent of spot bitcoin trading volume is faked by unregulated exchanges, according to a study from Bitwise this week. The firm analyzed the top 81 Author: Kate Rooney.
Bitcoin fake trading volumeBitcoin Trading Volume Review: Website Dedicated to Fake Crypto Exchange Activity by Bitwise
Not Positive For The Industry Several analysts have made their remarks on the report and its implications in the industry. Bitcoin Exchange Guide News Team. Add a picture. Choose file. Add a quote. Submit Cancel. Subscribe Replies to my comments All comments. Sorry, you must be logged in to post a comment. Sign Up. This does not account for mobile app or API usage to trade — web traffic is an assumption for simplicity.
Their expected volume was much higher than what they actually reported. As a result, the notion that they are faking their volume is far less likely. The factors that contribute to this are: crypto exchanges run 24 hours a day, the variety of assets is massive, and the global demand for cryptocurrency is still high. Demand may not be where it was during the bull months of , but Bitcoin traders still find a great deal of profit incentive in the volatile crypto markets.
Thus, crypto exchanges listing more exotic assets are gaining tremendously. Fake volume ranks a top concern among traders. HitBTC countered the accusations by writing a blog post specifying the fact that their client profile is different and basically cannot be used as an example as they tend to practice algo trading.
The white paper then makes another point: thanks to the arbitrage systems that control prices on the real global bitcoin spot exchanges, all these fake Bitcoin volumes have no effect on its price in the real BTC spot market. To begin with, every exchange needs liquidity.
A fair amount of clients and transactions contribute to real liquidity. Ideally, it should work like this: one user places an order looking to sell 1 BTC, and at the same time there is another user who wants to buy 1 BTC, so they seal the deal and everyone, including the exchange, is happy.
Or there are those who want to buy a different amount of BTC or a different coin. So what happens in this case?