A majority of Bitcoin trading volume is artificially created by unregulated exchanges, according to a Bitwise Asset Management report.<\/p>\n
Bitwise, which earlier this year proposed a Bitcoin exchange-traded fund (ETF), submitted this report<\/a> to the U.S. Securities and Exchange Commission (SEC) as part of its application process.<\/p>\n While CoinMarketCap, one of the most popular sources of crypto trading information, says the Bitcoin market\u2019s average daily volume is roughly $6 billion, Bitwise argues that, going by the firm\u2019s own methodology, the actual average daily Bitcoin trading volume is only $273 million.<\/p>\n The report analyzed Bitcoin trading data over four days in March, across 81 cryptocurrency exchanges. Specifically, Bitwise looked for patterns that show real and artificial trading, concluding that 95% of the reported trading volume of these exchanges were questionable, including “patterns that indicated the trading on them appears manufactured.”<\/p>\n “The fact that a significant portion of the reported daily volume in Bitcoin is demonstrably fake will be unsurprising to many in the industry. Market participants have long understood, and experienced first-hand, that a substantial portion of reported volume is fake. This report is simply the first time that the data has been comprehensively assembled and analyzed to formally corroborate those anecdotal suspicions,”<\/strong> said Matthew Hougan, Bitwise\u2019s head of global research.<\/p><\/blockquote>\n The firm says that when ignoring the fake volume, the Bitcoin market appears to be efficient, arbitraged and regulated.<\/p>\n However, Bitwise argues that the Bitcoin \u201cfutures market is significant\u201d when viewed in light of the remaining, genuine 5 percent of spot trading that occurs at regulated exchanges.<\/p>\n The average daily futures volume on two major Chicago-based exchanges, CME and Cboe, combined totals near $85 million, which is not too far off from the average daily spot volume of $110 million on Binance, the exchange which performs the largest number of legitimate trades, according to Bitwise.<\/p>\n The SEC has already explained that an ETF proposal must show that either the underlying market for a fund is \u201cuniquely resistant to manipulation,\u201d or that there is a regulated market of significant size. Bitwise\u2019s report tried to demonstrate both, Hougan added.<\/p>\n The SEC will make an initial decision on whether to approve, reject or extend the review period for Bitwise\u2019s ETF proposal sometime within the next week, with a legally-mandated deadline at the end of March<\/a>.<\/p>\n Follow ForkLog on Twitter<\/a><\/span> and Facebook<\/a><\/span>!<\/p>\n","protected":false},"excerpt":{"rendered":" A majority of Bitcoin trading volume is artificially created by unregulated exchanges, according to a Bitwise Asset Management report.<\/p>\n","protected":false},"author":1,"featured_media":6161,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"","cryptorium_level":"","_short_excerpt_text":"","creation_source":"human_written","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[949,569,609,128,436,958],"class_list":["post-6607","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-bitwise","tag-etf","tag-futures","tag-sec","tag-trading","tag-trading-volume"],"aioseo_notices":[],"amp_enabled":true,"views":"517","promo_type":"1","layout_type":"","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/6607","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=6607"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/6607\/revisions"}],"predecessor-version":[{"id":6608,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/6607\/revisions\/6608"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/6161"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=6607"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=6607"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=6607"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}