More than half of Bitcoin trades conducted on centralized platforms are economically meaningless and are fake. This was stated by analysts Forbes in the study.
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The publication’s specialists studied trading activity across 157 cryptocurrency exchanges. To assess the indicators they used regulator license information, data from services such as Messari and CoinGecko, network traffic data from SimilarWeb, and also conducted “dozens” of interviews with executives of large companies.
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Analysts concluded that as of June 14, 2022, the global daily trading volume in Bitcoin pairs stood at $128 billion. This is 51% lower than the $262 billion figure that would be obtained by adding up the values reported by the platforms themselves.
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Based on the study’s results, the publication divided cryptocurrency exchanges into three groups depending on the magnitude of deviation between the transmitted indicators and reality:
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- 0-25% — 48 platforms, which on June 14 generated in total $39 billion in trading volume;
- 26-79% — 73 exchanges that generated $81 billion (versus $158 billion claimed);
- 80-99% — the remaining 36 venues, generating $7.7 billion (versus $59 billion claimed).
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Analysts noted that the second group mostly includes emerging companies that lack reliable tools to track the use of fake trading practices (wash trading). The backbone of the third group comprises “unregulated and small” cryptocurrency exchanges.
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Earlier in March 2022, the U.S. Commodity Futures Trading Commission ordered Coinbase to pay $6.5 million in penalties for falsifying trading-activity data.
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