Over 51 percent of total Bitcoin trading volume on various crypto exchanges this year is fake amid volatile global economic conditions, according to a new report.
Bitcoin is the blue chip cryptocurrency, accounting for 40 percent of total crypto assets outstanding in the new and volatile crypto markets. Its market cap is currently 382.25 billion.
According to data from niche news publisher BanklessTimes.com, most of this fake Bitcoin volume is due to wash trading.
Wash trading is illegal when assets are bought and sold simultaneously on the same platform to create fake liquidity. This is often done through bots or spoofing orders.
Jonathan Merry said, “It’s difficult to talk about cryptocurrency without talking about bitcoin. Still, there are concerns that a large portion of Bitcoin’s daily trading volume is fake. This compromises the legitimacy of the exchange and the reliability of the data.” raises questions.” , CEO of Bankless Times.
Another factor contributing to the counterfeit volume is stablecoins like Tether (USDT). a
Tether pairs very well with Bitcoin and is often used to buy and sell Bitcoin on exchanges.
“This has resulted in a significant amount of volume being generated without Bitcoin ever changing hands,” the report said.
According to the report, fake trading volumes could be a way for exchanges to attract new customers.
By being more popular than they actually are, exchanges can fool investors into believing that there is more activity and liquidity on their platforms.
According to the report, another reason people wash trade is to increase the price of a particular asset.
By buying and selling assets at the same time, they can create the illusion of demand and drive up the price. This can be done for personal gain or to artificially increase the price of an asset before it is sold.
The report suggested: “Investors should be wary of exchanges reporting incorrect data. You should do your research and only use exchanges that you trust.”
(Only the title and image of this report may have been edited by Business Standard contributors; the rest of the content is automatically generated from a syndicated feed.)