Technology

Cryptocurrency: half of the volume of exchanges will be fake

A recent study showed that half of the volume of bitcoin transactions made on cryptocurrency exchanges was not genuine. The study concluded that these exchanges presented misleading data. Therefore, the study showed that many transactions on these platforms can be fraudulent.

Forbes conducted its research in June

In recent months, the cryptocurrency market has been going through a deep crisis. Meanwhile, Forbes published a study stating that half of all bitcoin transactions are fake. Cryptocurrency exchange platforms are also reported to be providing false information. This should not improve the public perception of Bitcoin.

According to data collected from 157 cryptocurrency exchanges, the global daily volume of cryptocurrency exchanges as of June 14, 2022 was approximately $262 billion. However, the American media claim that they recorded a trading volume of only 128 billion, which is almost half that.

“More than half of all reported trading volumes are likely false,” Forbes writes in its report.

According to this Forbes report, there is no universal system for estimating trading volume. For this reason, and based on their measurements, they claim that half of all registered trade is probably counterfeit. However, in this case, nothing is certain. Some of these companies specialize in information about cryptocurrencies, such as 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 the transactions shown on the cryptocurrency market are fake. Everyone has their own interpretation. volume estimators have difficulty identifying real transactions due to platforms that do not hesitate to use dubious methods to increase transaction volume.

Fish trading is the most famous example of such scams. This includes buying and selling the same crypto asset at the same time to create a high perceived demand. This is done to increase trading volumes. Thus, the platforms receive more commissions from real users making real transactions.

Bots – high-frequency trading robots – can make a large number of fictitious transactions due to their speed. Forbes notes that mostly unregulated platforms distort real trading volume. This is especially true for BitCoke, a Hong Kong-based exchange that is very popular in Argentina. Based on the number of visitors to the website, the report found that BitCoke was lying about its actual trading volume.

The actual volume of transactions will grow

Forbes claims that second-tier crypto exchanges use these methods most often, but larger ones like Binance also have falsely high trading volumes.

If Bitwise and Forbes’ estimates are correct, real trading volume will skyrocket in three years. As the prices of digital assets skyrocket, more and more users are choosing cryptocurrencies.

Currently, 200 million people around the world use cryptocurrencies. A Boston Consulting Group (BCG) study 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.

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker.