Report: 6 billion fake trading volume in cryptocurrency exchanges

Report: 6 billion fake trading volume in cryptocurrency exchanges

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Answer Report: 6 billion fake trading volume in cryptocurrency exchanges

A few days ago, the Blockchain Transparency Institute and the so-called BTI published a report claiming that cryptocurrency exchanges are manipulating an estimated $6 billion in daily trading volume in the cryptocurrency market.

Researchers at the BTI Institute evaluated user activity and the movement of cryptocurrency exchanges in the market, and compared the expected trading volume based on specific metrics and criteria.

The researchers used a method known as Slippage, a method previously used by researcher Sylvain Ribes, in previous research on cryptocurrency exchanges, which aimed to analyze the liquidity in the list of orders and check whether the exchanges are reporting correct numbers.

Almost half of the daily trading volume is considered fake

According to data from CoinMarketCap, the daily trading volume of the cryptocurrency market is approximately $13 billion. The BTI report stated that the fake trading volume reached 6 billion dollars, which is approximately 50% of the daily trading volume in the market.

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Many believe that the fake trading volume is due to the strategy of some cryptocurrency trading platforms in their use of automated trading (bot) in order to increase the trading volume on the platform and provide higher liquidity.

The research revealed that platforms such as Bittrex, KuCoin and Bithum, have reasonable trading volumes given the number of visitors to the platform, which is commensurate with the trading volumes.

Why do cryptocurrency exchanges manipulate trading volumes?

According to the report, the majority of traders turn to cryptocurrency trading platforms through other sites such as CoinMarketCap, and some platforms even rely more than 80% of their visitors from these sites.

Some platforms tend to manipulate trading volumes to attract investors by providing attractive data and high trading volumes, as the investor tends to avoid cryptocurrency trading platforms that face low liquidity due to the difficulty of buying and selling and the slow process of trading.

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