Only 10 Exchanges Have Actual Bitcoin Volume
Fake trading volume in the crypto markets is a long-established problem. However, just recently, with the publication of reports by the and , has the problem become more apparent. Although estimates of fake volume vary from 80% to as much as 95%, neither scenario is conducive to an industry trying to gain mainstream acceptance. Talking to the SEC on Bitwise’s Bitcoin ETF proposal, Teddy Fusaro, COO, and Matt Hougan, Head of Research, covered a discussion on fake volume. Their research on 81 exchanges included top-level analysis such as buy/sell patterns, investigating trade sizes, spread differences, as well as deeper dives through statistical analysis. They found:“Reported volume adds to roughly $6 billion/day, but under the hood the exchanges that report the highest volumes are unrecognizable. The vast majority of this reported volume is fake and/or non-economic wash trading.”
Better Quality Data
The research by Bitwise raises serious concerns over the legitimacy of the entire industry. Manipulated markets are duping genuine retail investors. Likewise, in consideration of this, the likelihood of institutional money coming into the space is slim. Fortunately, Messari is taking positive steps to address these issues. Hence, they recently announced changes to their metrics in order to help investors determine correct information.
We‘re adding two critical new metrics to our dashboard, products of over a year of research:(1) “Real 10” exchange volume
Read more: — Messari (@MessariCrypto)
(2) "Liquid Cap" market cap alternative
- Real 10 – refers to a price methodology that takes into account trading volume from only the “real 10” exchanges.
- Liquid Cap -is more accurate when including supply curve data for the top 50 assets by liquid cap. This is further enhanced by excluding data for discount tether-denominated prices and stablecoins.
The Response By CoinMarketCap
As the industry leader in crypto data aggregation, CMC must help clean up the space. In response to questioning by , Carylyne Chan, Global Head of Marketing, spoke of plans to include liquidity measures, hot and cold wallet balances and traffic data for listed exchanges. She said:“We want to state that our philosophy is to provide as much information as possible to our users, so that they can form their own conclusions and interpretations – and not introduce our own bias into that mix.”
We are listening to all our users' feedback, and we are working hard to add a suite of new metrics so users can get a fuller picture of exchanges and crypto on the site. What are some new metrics you would like to see? Share with us. 🙂 — CoinMarketCap (@CoinMarketCap)
Still waiting for your reply. — 𝚃𝚒𝚏𝚏𝚊𝚗𝚢 𝙷𝚊𝚢𝚍𝚎𝚗 (@haydentiff)