A rapport was recently released, revealing that 7 out of top ten exchanges are faking their daily volume. They are pumping their volume by 12 to over 100 times more than their true volume.
During the pasts months, news has stated that exchanges have manipulated trading volume. BigONE is one exchange that, four weeks back, reached the top three exchanges due to a rise in the volume of 6,300,000%. The interesting about this is that the volume was 2,3 times higher than Bittrex and 4,5 times higher than Poloniex. Bittrex had around 3,6 million users while BigONE only had 230,000. This served as strong evidence for manipulation.
During the same time, BitForex faked their volume as well. They topped the list with an astounding average trading volume of $12,824. That is four times higher than average. CER, Crypto Exchange Ranks, concluded that BitForex pumped their trading volume as well.
After the events, Coinmarketcap added features so it would be easier to track manipulations of volume. They added 7-day, and 30-day trading volume and the established dates for each exchanged listed.
“Our philosophy is to provide as much information as possible to our users so that they can form their conclusions and interpretations – and not introduce our own bias into that mix.”
On August 26, the Blockchain Transparency Institute (BTI) published a report claiming that the manipulation is not over and that the global exchanges are faking $6 billion of its daily volume. A new system was developed by BTI to provide better transparency for the crypto sphere on true exchange volumes. The new system is based on using slippage on exchanges faking volume by evidence of analysing order book liquidity, a research conducted by Sylvian Ribes.
“By my reckoning, over 3 billion dollars of daily volume is nonexistent. Possibly more. Somehow, the practice is, if not encouraged, at least thoroughly ignored by popular data aggregators and most of their users, when all anybody has to do is have a look to figure out that something is amiss”.
BTI says that not all exchanges manipulate the volume. Some cryptocurrency exchanges like Bittrex, Kucoin, and Bithumb have legitimate volumes, given that their unique visitor counts are proportional to their trading volume. Even though some are inflating the volume som are legitimate. However, the volume that is faked is staggering.
“Tallying up the volume numbers of the top 130 exchanges, it is estimated that over 6 billion dollars in daily trade volume are being faked with over 67% of the daily volume being traded. About 70% of the CMC top 100 is likely to engage in trading by at least 3x their stated volume”.
Many say that cryptocurrencies do not need regulation and according to Ribes, it is high time we prove that the system works without regulation.
“Crypto doesn‘t need regulation!”, We all claim. It is high time we proved it. Because as it stands the state of crypto is arguably a testament to the failure of the free-market.
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Dennis Sahlström has been trading and investing since 2012 and has for the last two years been consistently profitable. He has been in the crypto- and blockchain space since the middle of 2017 and realized its potential for our world, not least how it is transforming the society we live in. He has now created an education platform, together with the wealth coach Marcus the Maria. They teach regular people how to invest and trade in the cryptocurrency market with proven strategies. If you want to learn more and feel like its time to get into this new asset class, download our free book and register to the next live training to get your future in cryptocurrencies started.