Over half of all daily Bitcoin trading volume on crypto exchanges is fake, according to New Forbes research
The majority of Bitcoin’s daily trading volume on exchanges is fake, according to a new report from Forbes.
Forbes surveyed 157 crypto exchanges around the world and concluded that more than half of the exchanges’ reported Bitcoin (BTC) trading volume is “likely to be fake or non-economic.”
Trading volume data is likely inflated due to wash trading, a practice used to manipulate markets and inflate the appearance of market activity.
Wash trading is when an investor wants to simultaneously sell a financial instrument and then buy it back, or vice versa, generating fake trading volume to lure and mislead other investors.
Forbes assessed the credibility of a stock’s reported numbers using at least five data sets.
Explains the report,
“Data comes from four crypto media firms, CoinMarketCap, CoinGecko, Nomics and Messari, as well as several exchanges and two other third-party data providers.
We use volume discounts based on a proprietary methodology that relies on 10 factors, such as an exchange’s home regulator, if any, and volume metrics based on an exchange’s online traffic and estimated workforce size. We also use the number and quality of crypto licenses as a proxy to measure the sophistication of each crypto exchange in matters of regulation and trade monitoring.”
Exchanges with the lowest discount rate are considered the most credible, and the highest discount rate means they are the least credible.
The firms that had 0% discounts include Binance US, Bitbank, BitBNS, Bitbuy, Bithumb, Bitkub, Bitpanda Pro, Bitso, Bitstamp, Bittrex, Bitvavo, BTCMarkets, BtcTurk PRO, CME Group, Coin.Z.com, Coinbase Exchange, Coincheck, CoinDCX, Coinone, Coinzoom, Crypto.com, eToroX, FTX US, Gemini, Huobi Japan, Indodax, itBit, Kanga, Korbit, Kraken, Liquid, LMAX Digital, Luno, Mercado Bitcoin, OKCoin, Paribu, Upbit, WazirX, and Zaif .
Ecxhanges with 95% discount include 50x Exchange, ACDX, B2BX, BigONE, BitCoke, BitOffer, BTSE, CBX, DeversiFi, FanBit, GokuMarket, HitBTC, Hopex, Nami.Exchange, TOKOK and Zipmex.
Read Forbes’ full report here.
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Featured image: Shutterstock/Max Zalevsky
