Among the conclusions of the report was this startling factoid: across 81 exchanges that Bitwise analyzed, 95 percent of trading appeared to be fake (or, in technical parlance, “non-economic wash trading”). To some this points to bitcoin’s fundamental untrustworthiness. Mar 29, · Do you believe that 95% of Bitcoin Trading is fake? Thank you. KL. ANSWER: I did not conduct that study. It does sound a bit high. However, manipulation has been a historical problem in the commodity world. As I stated before, the manipulations were common practice in . Mar 22, · Bitwise Asset Management, which has filed with the Securities and Exchange Commission to trade a Bitcoin ETF, reports that 95% of current spot Bitcoin trading volume is fake.
95 bitcoin trading fake95% of all Bitcoin trades are fake, Bitwise tells SEC | Modern Consensus.
This is the first time someone has combed through data to prove it systemically, to quantify it. Only ten exchanges have actual volume. The real news from your study is not the fake volume, right? The real news is that if you ignore the echo chambers of fake numbers, the real market is very healthy.
One fact is that 95 percent of the volume is fake. The countervailing fact is that the real market is extraordinarily efficient and well developed. What did you find that makes you believe the market is healthy? For example, bitcoin trades on Coinbase with a spread of only one penny. Those are all extraordinarily tight markets.
Did that message get lost in the reporting of this? We knew the headline would be that 95 percent of the market is fake. But as you read through the second day stories that came out, there was a growing appreciation for the real market that is left over after tossing out the fake trading.
That journey can be painful. But ultimately it will get us in the right place. There were a lot of excesses and bad behavior in the ICO market in and and now that market has died down. The SEC is doing enforcement actions against many projects and that market is cleaning up. I think the same thing is happening now in data and we were lucky to be a catalyst for part of that. Some of the data reporting has changed since your study went public.
What exactly has changed? CoinMarketCap [which tracks market capitalizations] came up with a notice they are going to be adding new measures to their website. Exchanges may have an incentive to report fake volume. Bad actors may look to attract listings for new initial coin offerings, or ICOs, who want their cryptocurrency on an exchange where more trading goes on, Bitwise said. The office of New York Attorney General also flagged the issue in a recent report warning that exchanges are vulnerable.
Because most cryptocurrency trading platforms don't use the same monitoring tools as stock exchanges, SEC Chairman Jay Clayton has warned that investors may not get a fair assessment of bitcoin's price. Hougan said this also explains why trading volume for regulated bitcoin futures has seemed weak. Skip Navigation. Markets Pre-Markets U. 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 crypto exchanges by volume on industry site CoinMarketCap.