A recent study found that half of the volume of Bitcoin transactions made on cryptocurrency exchanges were not genuine. The study concluded that these exchanges presented misleading data. Therefore, the study suggested that many transactions on these platforms could be fraudulent.
Forbes conducted its study in Jun
The crypto market is going through a deep crisis in recent months. Meanwhile, Forbes media published a study indicating that half of all Bitcoin transactions are fake. Crypto exchange platforms are also said to provide false information. This should not improve the public perception of Bitcoin.
According to data obtained from 157 cryptocurrency exchanges, the global daily volume of cryptocurrency exchanges was approximately $262 billion as of June 14, 2022. However, the American media claims to have recorded only 128 billion in trading volume, almost half as much.
“More than half of all reported trade volume is likely to be false,” writes Forbes in its report.
According to this report by Forbes, there is no universal system for evaluating trade volume. For this reason and based on their measurements, they claim that half of all reported trade volume is probably fake. However, nothing is certain in this case. Some of these companies specialize in cryptocurrency information like CoinGecko, CoinMarketCap, or Messari. However, none of them provide guidance to explain their estimates.
Deceptive practices to lure users
According to a 2019 study by Bitwise, 95% of transactions shown on the cryptocurrency market are fake. Everyone has their own interpretation. specialists evaluating the volume of transactions have difficulty in identifying the real transactions because of the platforms which do not hesitate to employ dubious practices to increase their transaction volume.
Wash trading is the best-known example of such shenanigans. It involves buying and selling the same crypto asset at the same time to create high perceived demand. This is done to inflate trading volumes. Thus the platforms earn more commissions from real users making real trades.
Bots – high frequency trading robots – can perform large amounts of fake trades due to their speed. Forbes notes that it is mostly unregulated platforms that skew the true trading volume. This is especially the case with BitCoke, a Hong Kong-based exchange that is very popular in Argentina. Based on the number of website visitors, the report found that BitCoke was lying about its actual trading volume.
The actual transaction volume would be on the rise
Forbes claims that the second-tier crypto exchanges most regularly employ these kinds of practices, but the larger ones, such as Binance, also have falsely high trading volumes.
If Bitwise and Forbes estimates are correct, there would be a huge increase in actual trading volume in three years. As digital asset prices skyrocket, more and more users are embracing cryptocurrencies.
Currently, 200 million people around the world have used cryptocurrencies. A study by the Boston Consulting Group – BCG – concluded that the 1 billion mark will be reached by 2030. However, some people’s enthusiasm for cryptocurrencies may have waned due to the recent crisis.
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Crypto: half the volume of exchanges would be fake
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