[2013-03-23] 95% of Reported Bitcoin Trading Volume Is 'Fake'

gentlemand

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Quote from: stmar on March 29, 2019, 10:49:36 AM

Bloomberg:

The main thing I took away from that is that CMC is one of the world's top 500 most visited sites which I didn't know and find pretty incredible. That puts into perspective just how much power they've wound up with.

https://www.alexa.com/siteinfo/coinmarketcap.com

stmar

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Bloomberg:
Crypto Aggregator Says Concerns Over Inaccurate Data Are Valid

bbc.reporter

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Quote from: BitHodler on March 27, 2019, 05:51:27 AM

Quote from: bbc.reporter on March 26, 2019, 09:45:48 PM

Would you also reckon that it is also possible that many of those exchanges with fake volumes are a part of a global money laundering ring?

It could very well be yeah. Most of the exchanges in crypto are unregulated, and plan to stay unregulated. If your goal was to gain ground as legitimate and compliant exchange, which Coinbase is, you are completely open and willing to go for it.

Some exchanges do ask for KYC verification, but that's just an attempt to shake off unwanted attention from authorities. We don't know what's going on behind the scenes and they still are an unregulated entity.

Binance mildly started to ask for more personal information, but there is a reason they don't want to become regulated, and money laundering might be part of that, or maybe they just want to continue making insane amounts of money as they are doing now.

I might be totally wrong on the money laundering aspect, but I somehow feel there is something shady going on with Binance.

I reckon that a sign that exchanges are being used for money laundering are exchanges that have a lower than average price of bitcoin trading in them similar to BTCe. This might be because they are bitcoin to fiat exit points.

malikusama

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Quote from: mrdeposit on March 23, 2019, 03:53:24 PM

Quote from: stmar on March 23, 2019, 03:50:16 PM

95% of Reported Bitcoin Trading Volume Is 'Fake'

Bitwise Asset Management reports that CoinMarketCap (CMC) has been greatly exaggerating average bitcoin trading volumes.

CMC has been reporting BTC trading volumes of around $6 billion - whereas it's actually around $270 million according to Bitwise's research.

A recent study conducted by Bitwise Asset Management has revealed that as much as 95% of spot bitcoin (BTC) trading volume has been “faked” - as it’s being inaccurately reported by loosely regulated or completely unregulated cryptocurrency exchanges.

Founded in 2017, Bitwise Asset Management is a privately-held, San Francisco-based crypto research firm that also serves as a “trusted partner to individuals, wealth managers, family offices, investment managers and institutions” in making business-related decisions in the digital asset industry.

In its extensive report, the research team at Bitwise analyzed the world’s top 81 crypto exchanges, in terms of trading volume, and found that financial data reported by CoinMarketCap (CMC), a leading crypto data provider, had been artificially inflated. Researchers at Bitwise claim that CMC had reported a combined $6 billion in average daily trading volume. However, the results of a study commissioned by it revealed that only $273 million of CMC’s reported BTC trading volume was “legitimate.”

<.....>

Read:
https://www.cryptoglobe.com/latest/2019/03/95-of-bitcoin-trading-volume-reported-on-coinmarketcap-is-fake-bitwise-report/

Interesting article but some questions come to my mind while reading it. First of all, why CMC need to show crypto trading volume so high or inflated? The increased fake volume will not bring any additional advantage to their site but these fake numbers can be used for manipulation purposes from my point of view.

CMC can easily be manipulated by the exchanges, it can't detect or remove the fake volume because it can only show exact amount according to the data which is provided by the exchanges.
So exchanges (which are creating fake volume) are responsible for it not CMC.
Many exchanges like Coinbene, OKEx and OEX are one of them and currently leading the list of "top exchanges with fake volume".

BitHodler

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Quote from: bbc.reporter on March 26, 2019, 09:45:48 PM

Would you also reckon that it is also possible that many of those exchanges with fake volumes are a part of a global money laundering ring?

It could very well be yeah. Most of the exchanges in crypto are unregulated, and plan to stay unregulated. If your goal was to gain ground as legitimate and compliant exchange, which Coinbase is, you are completely open and willing to go for it.

Some exchanges do ask for KYC verification, but that's just an attempt to shake off unwanted attention from authorities. We don't know what's going on behind the scenes and they still are an unregulated entity.

Binance mildly started to ask for more personal information, but there is a reason they don't want to become regulated, and money laundering might be part of that, or maybe they just want to continue making insane amounts of money as they are doing now.

I might be totally wrong on the money laundering aspect, but I somehow feel there is something shady going on with Binance.

gentlemand

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Quote from: bbc.reporter on March 26, 2019, 09:45:48 PM

@gentlemand. Would you also reckon that it is also possible that many of those exchanges with fake volumes are a part of a global money laundering ring?

I don't reckon that myself. There are a million and one less obvious and lower profile ways to go about it than dicking around with crypto, let alone run an exchange. Memories are long and blockchains remember forever.

glowing10

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Quote from: bbc.reporter on March 26, 2019, 09:45:48 PM

@gentlemand. Would you also reckon that it is also possible that many of those exchanges with fake volumes are a part of a global money laundering ring?

Just in case if this things happen then their will be a major blow to the crypto currency because government will taker a corrective steps and also put a ban if they are legal in their country and finds out that it is being misused to a greater extent which could act as a blow on the crypto currency.

earnfreecoins

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Quote from: gentlemand on March 26, 2019, 09:11:24 PM

Quote from: bbc.reporter on March 26, 2019, 07:07:51 PM

How do cryptocoin exchanges with fake volume earn money if they are only wash trading with themselves? Also, why are they doing this?

By faking it till you make it?

I've seen quite a few threads on here from newcomers who can't understand why that super amazing exchange that has trillions of users is literally unusable and every single order they attempt never goes through.

They can also point to their 'volume' and charge new projects a large listing fee because of that amazing userbase. The shitcoiners who pay it probably know they're paying for nothing other than bilge but again that 'volume' is going to draw in pinhead investors. It's nothingness built on nothingness but enough real dollars are milked from saps.

What you are telling is for the reason to show the users that this site is having big volumes so that user should invest in their site and trade, so that when they get enough users to scam they will come out with hacking or some other excuses and scam the users. So always take caution when trading with fake volume trading exchanges.

bbc.reporter

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@gentlemand. Would you also reckon that it is also possible that many of those exchanges with fake volumes are a part of a global money laundering ring?

gentlemand

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Quote from: bbc.reporter on March 26, 2019, 07:07:51 PM

How do cryptocoin exchanges with fake volume earn money if they are only wash trading with themselves? Also, why are they doing this?

By faking it till you make it?

I've seen quite a few threads on here from newcomers who can't understand why that super amazing exchange that has trillions of users is literally unusable and every single order they attempt never goes through.

They can also point to their 'volume' and charge new projects a large listing fee because of that amazing userbase. The shitcoiners who pay it probably know they're paying for nothing other than bilge but again that 'volume' is going to draw in pinhead investors. It's nothingness built on nothingness but enough real dollars are milked from saps.

bbc.reporter

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Quote from: BitHodler on March 25, 2019, 04:14:57 AM

Quote from: Betwrong on March 24, 2019, 11:48:02 AM

But I'm not sure about that. It's possible that crypto currencies have been traded more aggressively than stocks, and then the volumes on CMC are more or less correct.

Nah. It wouldn't surprise me if the volumes of most altcoins are for 98% fake. Exchanges are incentivized to continue pumping up their volumes because their competitors do that as well.

If one exchange reports $10 million in volume, the other will push it to $12 million, then another one does $15 million, and this continues till these manipulative exchanges implode (which I do hope to see happen sooner rather than later).

The amount of garbage we have to go through here is mind boggling. Instead of seeing markets mature, we're going backwards where people don't even seem to care about it anymore....

How do cryptocoin exchanges with fake volume earn money if they are only wash trading with themselves? Also, why are they doing this?

figmentofmyass

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Quote from: gentlemand on March 25, 2019, 06:31:36 AM

Another aspect of reports like this is that is suddenly makes tales like the Gox liquidations and Calvin Ayre shitting the price seem a lot more plausible. If the 'real' market is a lot thinner than it looks on the surface then one loaded up entity definitely can bat the price around.

it's a thin market, always has been.

but i don't think events like that dictate price trends per se. if demand were strong, it could absorb those dumps and recover. think of the silk road dump in 2013 for example. the market bucked the crash in a day and erupted into a bubble shortly after.

weak demand points to bear market conditions, and that's a crucial ingredient for things like this to matter.

Bitcoin_Arena

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Not sure about the 95% bit but Fake trade volumes are a big reality.
I have seen it with my very own eyes especially with small exchanges that try to pump the daily trade volumes using bots so that they can rank high enough in the coinmarketcap charts.
Diginifex is one of such exchanges Angry

You will never see an order on the orderbook getting completed but when you look at the trade history, it shows trades are being executed every second and the funny bit is the quantity of coins bout or sold is in the same figure range.
When the bot stops, trading stops, the trade history stops too until the bot resumes again after some hours

Betwrong

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Quote from: Naida_BR on March 25, 2019, 08:18:46 AM

That doesn't surprise me at all.
In this period where the bear market insists, projects try to "manipulate" the community by promoting their project in a fake way. Fake volumes, paid shilling etc. it is all around the bitcointalk forum.

It is very sad to see that, and this is another reason that I do not invest anymore.
They will realize that they do more harm than good in the end.

The thing is that people normally don't care about the overall situation. What they do care is the supposed potential success of their own project, and they think they can trample over the heads of others on this way. Perhaps we should remind ourselves more frequently that we are in the same boat, so to speak. Not only we should restrain ourselves from rocking the boat, but sometimes we should help if there are problems on the other end.

Naida_BR

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That doesn't surprise me at all.
In this period where the bear market insists, projects try to "manipulate" the community by promoting their project in a fake way. Fake volumes, paid shilling etc. it is all around the bitcointalk forum.

It is very sad to see that, and this is another reason that I do not invest anymore.
They will realize that they do more harm than good in the end.

nutildah

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Quote from: gentlemand on March 25, 2019, 06:31:36 AM

Quote from: nutildah on March 25, 2019, 05:29:35 AM

Edit: there's at least a couple of SEC-approved exchanges, Gemini and CBOE

In what way are they SEC approved? Gemini have had plenty of dealings with them but that's about it.

OK I have to edit my edit.

Gemini was only approved by the New York Department of Financial Services.

https://gemini.com/about/

CBOE is SEC approved.

https://www.sec.gov/fast-answers/divisionsmarketregmrexchangesshtml.html

gentlemand

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Quote from: nutildah on March 25, 2019, 05:29:35 AM

Edit: there's at least a couple of SEC-approved exchanges, Gemini and CBOE

In what way are they SEC approved? Gemini have had plenty of dealings with them but that's about it.

One of the more interesting tales out there is Poloniex's acquisition by Circle. That had SEC fingerprints all over it.

https://u.today/leaked-sec-agreed-not-to-pursue-enforcement-action-against-poloniex-if-acquired-by-circle

Another aspect of reports like this is that is suddenly makes tales like the Gox liquidations and Calvin Ayre shitting the price seem a lot more plausible. If the 'real' market is a lot thinner than it looks on the surface then one loaded up entity definitely can bat the price around.

elda34b

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Quote from: nutildah on March 25, 2019, 05:29:35 AM

From what I read in the SEC denial of the Gemini Trust ETF, this may not be enough to guarantee approval, though, as it sounds like they wanted some sort of fraud monitoring agreements with other SEC-approved exchanges, and I'm not sure there are any...

If we need centralised party to manage this kind of problem, I think it's a bit ironic. We should've another alternative such as decentralised exchange, but the problem is lack of volume. Unless centralised exchanges got taken down by government, I think DEX with high-volume and low spread is not possible (DEX as in cross-chain DEX).

Well, anyway I hope those people who 'manipulate' the market can get punished if they are really guilty.

nutildah

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Bitwise is indeed wise, because they are using this report to prop up the case for approval of their own Bitcoin ETF, which will take spot prices from the exchanges deemed non-manipulative to calculate their ETF price.

https://www.coindesk.com/bitcoin-futures-volume-is-more-significant-than-you-think-bitwise-says

From what I read in the SEC denial of the Gemini Trust ETF, this may not be enough to guarantee approval, though, as it sounds like they wanted some sort of fraud monitoring agreements with other SEC-approved exchanges, and I'm not sure there are any...

Edit: there's at least a couple of SEC-approved exchanges, Gemini and CBOE

BitHodler

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Quote from: Betwrong on March 24, 2019, 11:48:02 AM

But I'm not sure about that. It's possible that crypto currencies have been traded more aggressively than stocks, and then the volumes on CMC are more or less correct.

Nah. It wouldn't surprise me if the volumes of most altcoins are for 98% fake. Exchanges are incentivized to continue pumping up their volumes because their competitors do that as well.

If one exchange reports $10 million in volume, the other will push it to $12 million, then another one does $15 million, and this continues till these manipulative exchanges implode (which I do hope to see happen sooner rather than later).

The amount of garbage we have to go through here is mind boggling. Instead of seeing markets mature, we're going backwards where people don't even seem to care about it anymore....

Topic: [2013-03-23] 95% of Reported Bitcoin Trading Volume Is 'Fake' (Read 400 times)