New research presented to the SEC by Bitwise Asset Management claims that 95% of the reported BTC spot volume is false. According to Bitwise, only 10 exchanges actually have volume … but that is not all the bad news for the bitcoin market.
95% of Bitcoin Exchange Volume is False
Claiming trade in laundry and false volumes is nothing new. Groups like the Blockchain Transparency Institute have published more detailed reports on the problem. But the suggestion that 95% of the volume is false marks a new high (or low) point. The main reason for a switch to false volume is to inflate the listing fees it can charge.
1/ New research from us @BitwiseInvest .
As part of the 226 slides presented to the SEC on our ETF filing, we made an initial analysis of * order book data * from all 81 exchanges reporting> $ 1M in BTC volume to CMC.
TLDR: 95% of reported volume is false but many of good news! pic.twitter.com/TuXLlDCRyP
– Bitwise (@BitwiseInvest) March 22, 2019
According to the study, only ten exchanges reporting over $ 1 million average daily volume on CoinMarketCap , genuine. These are Binance, Bitfinex, Crack, Bitstamp, Coinbase, BitFlyer, Gemini, ItBit, Bittrex and Poloniex. The report excluded Korean exchanges, and Cex.io passed the test but reported under $ 1 million. Volume.
Many exchanges are not trying to cover it
The report presentation provides a good comparison showing how to tell a real exchange from a suspicious. When comparing the two side by side, some fakery exchanges seem dazzling.
At a genuine exchange trade split between buying and selling will be random; Quantities will be both large and small, with a significant number of round numbers. Volumes will fluctuate over time with more busy and quieter periods; and the spread (difference in purchase and sale price) will typically be just a few cents.
On the other hand, suspicious exchanges often have trades that come in pairs (a purchase and a seller). It is very unlikely that real trades would occur in such a pattern. The trades are for similar quantities without very small trades and no & # 39; round number & # 39; acts in spite of a human preference for round numbers.
Misunderstanding exchanges are likely to have greater spread despite presumably massive volumes. Volumes will remain approximately constant per minute. Time Period, or Perhaps Periodically or Even Days.
This smaller market is & # 39; more organized & # 39; to Bitcoin ETF
So Bitwise promised us some good news. But in reality it is more like just good news for them. Because this research was actually submitted to the SEC in support of Bitwise's Bitcoin ETF application. So the good news is that despite an alleged 95% of volume is false:
The real market for bitcoin is significantly smaller, more orderly and more regulated than commonly understood.
Well, who is that? The bad news, of course, is that now disgusting exchanges know how to adjust their bots to avoid detection.
Will this research from Bitwise have a positive effect on their Bitcoin ETF application? Share your thoughts below !
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