Cryptocurrency Exchange Volumes May Allegedly Be Full of Fake Activity, but Bitcoin’s Value Is Not

Bitwise Asset Management recently presented to the U.S. Securities and Exchange Commission in an effort to gain approval for its proposed rule change which would allow it to launch a BTC ETF. The detailed report related to the presentation provided some alarming allegations on bitcoin exchange trading volumes. Specifically, the report stated:

“Despite its widespread use, the data is wrong. It includes a large amount of fake and or non-economic trading volume, thereby giving a fundamentally mistaken impression of the true size and nature of the bitcoin market.”

It is interesting that Bitwise would choose to highlight this bit of information in its presentation. The point does support Bitwise’s argument though, which may be that by eliminating financial intermediaries necessary to execute trades in the traditional financial system, the technology may be able to promote for participants more efficiency and market participation.

There are those who have praised Bitwise for coming under the SEC’s scrutiny during its ETF proposal process, and for issuing the detailed report – even though it shares information that others do not want to recognize. For example, Jeremy Allaire, CEO, and co-founder of Circle stated

“Great work from @BitwiseInvest helping the market understand what’s real and what’s fake. If we want crypto capital markets to go mainstream we need data investors can believe in.”

Allaire has a point – the SEC’s goal is to create a safe and regulated environment for all types of investors and Bitwise has helped further that goal by being open and transparent.

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