The majority of Bitcoin daily trading volume on exchanges is fake, according to a new report from Forbes.
Forbes examined 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 that’s used to manipulate markets and to pump up the appearance of marketplace activity.
Wash trading is when an investor will simultaneously sell a financial instrument and then buy it back, or vice versa, generating fake trading volume to lure and mislead other investors.
Forbes graded the credibility of an exchange’s reported numbers by utilizing at least five datasets.
Explains the report,
“Data comes from four crypto media firms, CoinMarketCap, CoinGecko, Nomics and Messari, as well as multiple exchanges and two other third-party data providers.
We apply 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 web traffic and estimated workforce size. We also use the number and quality of crypto licenses as proxy to gauge the sophistication of each crypto exchange in matters pertaining to regulation and trade surveillance.”
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% discount rates 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 rates 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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