Thanks for all your answers, I have a clearer idea on the matter now.
Topic: Why is 0 trading fees regarded as fake volume? (Read 774 times)
Consider the following scenarios:
1) 100,000 btc 24hr volume by 10,000 traders, with 90% of trades by 9,000 traders; and
2) 500,000 btc 24hr volume by 100 traders, with 90% of trades by 10 traders.
A noob investor/trader is likely to consider high volume as an indication of high demand, especially after a calm period. In 2), the few major traders can manipulate the price around at will.
This should be common sense.
1) 100,000 btc 24hr volume by 10,000 traders, with 90% of trades by 9,000 traders; and
2) 500,000 btc 24hr volume by 100 traders, with 90% of trades by 10 traders.
A noob investor/trader is likely to consider high volume as an indication of high demand, especially after a calm period. In 2), the few major traders can manipulate the price around at will.
This should be common sense.
There's the potential for some percentage of trades to be "fake volume". A lot of people are putting their tinfoil hats on though.. What was btcchina volume prior to going "fee free"? Has it gone up 10 fold? 2 fold?
What % increase in legitimate volume would you expect after an exchange goes fee free?
What % increase in legitimate volume would you expect after an exchange goes fee free?
Because you can trade with yourself without losing anything. It also encourages trading back and forth a lot, so volumes are way higher than usual, even if the Bitcoins don't really change hands so much.
It's not that the whole volume is fake, it's just that it's not comparable to other trading volumes with fees.
It's not that the whole volume is fake, it's just that it's not comparable to other trading volumes with fees.
Set 100 BTC ask and buy it yourself the second after that. See?
Othervise fees are high cost for daytraders.
Othervise fees are high cost for daytraders.
As topic says, why do people regard trades without fees as fake volume?
Let's say the trades really happens (money changes hands and btc/whatevercoin changes hands) why would that be fake trading volume?
Enlighten me please.
Thanks
Let's say the trades really happens (money changes hands and btc/whatevercoin changes hands) why would that be fake trading volume?
Enlighten me please.
Thanks
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