Forbes conducted a study of Bitcoin transactions. It showed that estimates of platforms that are considered reputable do not reflect real picture of BTC trading volume.
More than half of the trades on exchanges with BTC are fake. According to a study conducted by Forbes. The reasons are so-called “wash trading” and poor monitoring of exchanges.
Wash trading is when a trader repeatedly buys and sells the same asset over a short period of time. Thus trying to mislead other market participants about price or liquidity of asset. The purpose of these operations is to inflate trading volume and create the appearance of growing popularity of the asset. The Forbes article notes that wash trading also benefits exchanges.
The study found that BTC trading volumes calculated by platforms considered reputable do not reflect the real picture. Resources such as CoinMarketCap, CoinGecko, Nomics and Messari give completely different estimates of daily Bitcoin trading. Forbes estimated the total daily trading volume of bitcoin on June 14 at $128 billion. This is half as much as the $262 billion volume reported by these platforms.
The most problematic in terms of counterfeit volumes are platforms. Which report big numbers but operate with little or no regulatory oversight. These are the likes of Binance, MEXC Global and Bybit. In total, less-regulated exchanges account for about $89 billion in real trading volume, according to the study. Whereas according to these platforms, the index was at $217 billion.
Our experts are not surprised that volumes of BTC and other popular cryptocurrencies can be fake. Because we see large volumes on many non-popular exchanges. But in fact many of them don’t have big amount of users for those volumes which they show. So it’s not surprising that even big platforms like Binance use fake volumes.
But we believe that in the near future many exchanges will no longer be able to do this. Because many countries are restricting and starting to strictly regulate all major CEX exchanges.
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